Correlation Between FEMALE HEALTH and KIMBALL ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both FEMALE HEALTH 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 FEMALE HEALTH and KIMBALL ELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FEMALE HEALTH and KIMBALL ELECTRONICS, you can compare the effects of market volatilities on FEMALE HEALTH 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 FEMALE HEALTH with a short position of KIMBALL ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of FEMALE HEALTH and KIMBALL ELECTRONICS.
Diversification Opportunities for FEMALE HEALTH and KIMBALL ELECTRONICS
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between FEMALE and KIMBALL is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding FEMALE HEALTH and KIMBALL ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIMBALL ELECTRONICS and FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH i.e., FEMALE HEALTH and KIMBALL ELECTRONICS go up and down completely randomly.
Pair Corralation between FEMALE HEALTH and KIMBALL ELECTRONICS
Assuming the 90 days trading horizon FEMALE HEALTH is expected to generate 6.56 times more return on investment than KIMBALL ELECTRONICS. However, FEMALE HEALTH is 6.56 times more volatile than KIMBALL ELECTRONICS. It trades about 0.44 of its potential returns per unit of risk. KIMBALL ELECTRONICS is currently generating about 0.01 per unit of risk. If you would invest 65.00 in FEMALE HEALTH on October 28, 2024 and sell it today you would earn a total of 57.00 from holding FEMALE HEALTH or generate 87.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FEMALE HEALTH vs. KIMBALL ELECTRONICS
Performance |
| Timeline |
| FEMALE HEALTH |
| KIMBALL ELECTRONICS |
FEMALE HEALTH and KIMBALL ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FEMALE HEALTH and KIMBALL ELECTRONICS
The main advantage of trading using opposite FEMALE HEALTH and KIMBALL ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FEMALE HEALTH 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.| FEMALE HEALTH vs. Apple Inc | FEMALE HEALTH vs. Apple Inc | FEMALE HEALTH vs. Apple Inc | FEMALE HEALTH vs. Apple Inc |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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