Correlation Between Desktop Metal and Kimball Electronics
Can any of the company-specific risk be diversified away by investing in both Desktop Metal 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 Desktop Metal and Kimball Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Desktop Metal and Kimball Electronics, you can compare the effects of market volatilities on Desktop Metal 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 Desktop Metal with a short position of Kimball Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Desktop Metal and Kimball Electronics.
Diversification Opportunities for Desktop Metal and Kimball Electronics
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Desktop and Kimball is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Desktop Metal and Kimball Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimball Electronics and Desktop Metal 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 Desktop Metal 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 Desktop Metal i.e., Desktop Metal and Kimball Electronics go up and down completely randomly.
Pair Corralation between Desktop Metal and Kimball Electronics
Allowing for the 90-day total investment horizon Desktop Metal is expected to generate 103.24 times less return on investment than Kimball Electronics. In addition to that, Desktop Metal is 1.4 times more volatile than Kimball Electronics. It trades about 0.0 of its total potential returns per unit of risk. Kimball Electronics is currently generating about 0.08 per unit of volatility. If you would invest 1,778 in Kimball Electronics on September 3, 2024 and sell it today you would earn a total of 183.00 from holding Kimball Electronics or generate 10.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Desktop Metal vs. Kimball Electronics
Performance |
| Timeline |
| Desktop Metal |
| Kimball Electronics |
Desktop Metal and Kimball Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Desktop Metal and Kimball Electronics
The main advantage of trading using opposite Desktop Metal and Kimball Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Desktop Metal 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.| Desktop Metal vs. Nano Dimension | Desktop Metal vs. 3D Systems | Desktop Metal vs. Markforged Holding Corp | Desktop Metal vs. Stratasys |
| Kimball Electronics vs. Hayward Holdings | Kimball Electronics vs. Enersys | Kimball Electronics vs. Espey Mfg Electronics | Kimball Electronics vs. Advanced Energy Industries |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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