Correlation Between Ilika Plc and Kimball Electronics
Can any of the company-specific risk be diversified away by investing in both Ilika Plc 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 Ilika Plc and Kimball Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ilika plc and Kimball Electronics, you can compare the effects of market volatilities on Ilika Plc 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 Ilika Plc with a short position of Kimball Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ilika Plc and Kimball Electronics.
Diversification Opportunities for Ilika Plc and Kimball Electronics
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ilika and Kimball is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Ilika plc and Kimball Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimball Electronics and Ilika Plc 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 Ilika plc 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 Ilika Plc i.e., Ilika Plc and Kimball Electronics go up and down completely randomly.
Pair Corralation between Ilika Plc and Kimball Electronics
Assuming the 90 days horizon Ilika plc is expected to under-perform the Kimball Electronics. In addition to that, Ilika Plc is 2.06 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 2,523 in Kimball Electronics on August 29, 2024 and sell it today you would lose (589.00) from holding Kimball Electronics or give up 23.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ilika plc vs. Kimball Electronics
Performance |
| Timeline |
| Ilika plc |
| Kimball Electronics |
Ilika Plc and Kimball Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ilika Plc and Kimball Electronics
The main advantage of trading using opposite Ilika Plc and Kimball Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ilika Plc 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.| Ilika Plc vs. Novonix Ltd ADR | Ilika Plc vs. Magnis Energy Technologies | Ilika Plc vs. Exro Technologies | Ilika Plc vs. FuelPositive Corp |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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