Correlation Between Acuity Brands and Kimball Electronics
Can any of the company-specific risk be diversified away by investing in both Acuity Brands and Kimball Electronics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Acuity Brands and Kimball Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acuity Brands and Kimball Electronics, you can compare the effects of market volatilities on Acuity Brands and Kimball Electronics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Acuity Brands with a short position of Kimball Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acuity Brands and Kimball Electronics.
Diversification Opportunities for Acuity Brands and Kimball Electronics
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Acuity and Kimball is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Acuity Brands and Kimball Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimball Electronics and Acuity Brands is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Acuity Brands are associated (or correlated) with Kimball Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kimball Electronics has no effect on the direction of Acuity Brands i.e., Acuity Brands and Kimball Electronics go up and down completely randomly.
Pair Corralation between Acuity Brands and Kimball Electronics
Considering the 90-day investment horizon Acuity Brands is expected to generate 0.79 times more return on investment than Kimball Electronics. However, Acuity Brands is 1.27 times less risky than Kimball Electronics. It trades about 0.07 of its potential returns per unit of risk. Kimball Electronics is currently generating about 0.0 per unit of risk. If you would invest 18,800 in Acuity Brands on August 23, 2024 and sell it today you would earn a total of 13,241 from holding Acuity Brands or generate 70.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acuity Brands vs. Kimball Electronics
Performance |
| Timeline |
| Acuity Brands |
| Kimball Electronics |
Acuity Brands and Kimball Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acuity Brands and Kimball Electronics
The main advantage of trading using opposite Acuity Brands and Kimball Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acuity Brands position performs unexpectedly, Kimball Electronics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Kimball Electronics will offset losses from the drop in Kimball Electronics' long position.| Acuity Brands vs. Energizer Holdings | Acuity Brands vs. Espey Mfg Electronics | Acuity Brands vs. Preformed Line Products | Acuity Brands vs. nVent Electric PLC |
| Kimball Electronics vs. MKS Instruments | Kimball Electronics vs. Axcelis Technologies | Kimball Electronics vs. Entegris | Kimball Electronics vs. Cohu Inc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stocks Directory module to find actively traded stocks across global markets.
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