Correlation Between Hayward Holdings and Kimball Electronics
Can any of the company-specific risk be diversified away by investing in both Hayward Holdings 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 Hayward Holdings and Kimball Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hayward Holdings and Kimball Electronics, you can compare the effects of market volatilities on Hayward Holdings 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 Hayward Holdings with a short position of Kimball Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hayward Holdings and Kimball Electronics.
Diversification Opportunities for Hayward Holdings and Kimball Electronics
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hayward and Kimball is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Hayward Holdings and Kimball Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimball Electronics and Hayward Holdings 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 Hayward Holdings 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 Hayward Holdings i.e., Hayward Holdings and Kimball Electronics go up and down completely randomly.
Pair Corralation between Hayward Holdings and Kimball Electronics
Given the investment horizon of 90 days Hayward Holdings is expected to generate 0.76 times more return on investment than Kimball Electronics. However, Hayward Holdings is 1.32 times less risky than Kimball Electronics. It trades about 0.25 of its potential returns per unit of risk. Kimball Electronics is currently generating about 0.18 per unit of risk. If you would invest 1,480 in Hayward Holdings on August 28, 2024 and sell it today you would earn a total of 160.00 from holding Hayward Holdings or generate 10.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hayward Holdings vs. Kimball Electronics
Performance |
| Timeline |
| Hayward Holdings |
| Kimball Electronics |
Hayward Holdings and Kimball Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hayward Holdings and Kimball Electronics
The main advantage of trading using opposite Hayward Holdings and Kimball Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hayward Holdings 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.| Hayward Holdings vs. Kimball Electronics | Hayward Holdings vs. Enersys | Hayward Holdings vs. Espey Mfg Electronics | Hayward Holdings vs. Energizer Holdings |
| 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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