Correlation Between REVO INSURANCE and KIMBALL ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both REVO INSURANCE 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 REVO INSURANCE and KIMBALL ELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REVO INSURANCE SPA and KIMBALL ELECTRONICS, you can compare the effects of market volatilities on REVO INSURANCE 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 REVO INSURANCE with a short position of KIMBALL ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of REVO INSURANCE and KIMBALL ELECTRONICS.
Diversification Opportunities for REVO INSURANCE and KIMBALL ELECTRONICS
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between REVO and KIMBALL is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding REVO INSURANCE SPA and KIMBALL ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIMBALL ELECTRONICS and REVO INSURANCE 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 REVO INSURANCE SPA 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 REVO INSURANCE i.e., REVO INSURANCE and KIMBALL ELECTRONICS go up and down completely randomly.
Pair Corralation between REVO INSURANCE and KIMBALL ELECTRONICS
Assuming the 90 days horizon REVO INSURANCE SPA is expected to generate 0.59 times more return on investment than KIMBALL ELECTRONICS. However, REVO INSURANCE SPA is 1.7 times less risky than KIMBALL ELECTRONICS. It trades about 0.26 of its potential returns per unit of risk. KIMBALL ELECTRONICS is currently generating about -0.17 per unit of risk. If you would invest 1,030 in REVO INSURANCE SPA on September 13, 2024 and sell it today you would earn a total of 65.00 from holding REVO INSURANCE SPA or generate 6.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REVO INSURANCE SPA vs. KIMBALL ELECTRONICS
Performance |
| Timeline |
| REVO INSURANCE SPA |
| KIMBALL ELECTRONICS |
REVO INSURANCE and KIMBALL ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REVO INSURANCE and KIMBALL ELECTRONICS
The main advantage of trading using opposite REVO INSURANCE and KIMBALL ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REVO INSURANCE 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.| REVO INSURANCE vs. Lyxor 1 | REVO INSURANCE vs. Xtrackers LevDAX | REVO INSURANCE vs. Xtrackers ShortDAX | REVO INSURANCE vs. Superior Plus Corp |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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