Correlation Between CAPITAL ONE and KIMBALL ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both CAPITAL ONE 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 CAPITAL ONE and KIMBALL ELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAPITAL ONE FIN and KIMBALL ELECTRONICS, you can compare the effects of market volatilities on CAPITAL ONE 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 CAPITAL ONE with a short position of KIMBALL ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAPITAL ONE and KIMBALL ELECTRONICS.
Diversification Opportunities for CAPITAL ONE and KIMBALL ELECTRONICS
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between CAPITAL and KIMBALL is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding CAPITAL ONE FIN and KIMBALL ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIMBALL ELECTRONICS and CAPITAL ONE 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 CAPITAL ONE FIN 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 CAPITAL ONE i.e., CAPITAL ONE and KIMBALL ELECTRONICS go up and down completely randomly.
Pair Corralation between CAPITAL ONE and KIMBALL ELECTRONICS
Assuming the 90 days trading horizon CAPITAL ONE FIN is expected to under-perform the KIMBALL ELECTRONICS. In addition to that, CAPITAL ONE is 1.97 times more volatile than KIMBALL ELECTRONICS. It trades about -0.03 of its total potential returns per unit of risk. KIMBALL ELECTRONICS is currently generating about -0.03 per unit of volatility. If you would invest 2,520 in KIMBALL ELECTRONICS on September 12, 2024 and sell it today you would lose (730.00) from holding KIMBALL ELECTRONICS or give up 28.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAPITAL ONE FIN vs. KIMBALL ELECTRONICS
Performance |
| Timeline |
| CAPITAL ONE FIN |
| KIMBALL ELECTRONICS |
CAPITAL ONE and KIMBALL ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAPITAL ONE and KIMBALL ELECTRONICS
The main advantage of trading using opposite CAPITAL ONE and KIMBALL ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAPITAL ONE 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's long position.| CAPITAL ONE vs. ALBIS LEASING AG | CAPITAL ONE vs. UNITED UTILITIES GR | CAPITAL ONE vs. Micron Technology | CAPITAL ONE vs. Chesapeake Utilities |
| KIMBALL ELECTRONICS vs. Superior Plus Corp | KIMBALL ELECTRONICS vs. SIVERS SEMICONDUCTORS AB | KIMBALL ELECTRONICS vs. Norsk Hydro ASA | KIMBALL ELECTRONICS vs. Reliance Steel Aluminum |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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