Correlation Between Kimball International and Ethan Allen
Can any of the company-specific risk be diversified away by investing in both Kimball International and Ethan Allen 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 Kimball International and Ethan Allen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kimball International and Ethan Allen Interiors, you can compare the effects of market volatilities on Kimball International and Ethan Allen 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 Kimball International with a short position of Ethan Allen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimball International and Ethan Allen.
Diversification Opportunities for Kimball International and Ethan Allen
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kimball and Ethan is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Kimball International and Ethan Allen Interiors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ethan Allen Interiors and Kimball International 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 Kimball International are associated (or correlated) with Ethan Allen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ethan Allen Interiors has no effect on the direction of Kimball International i.e., Kimball International and Ethan Allen go up and down completely randomly.
Pair Corralation between Kimball International and Ethan Allen
If you would invest 2,938 in Ethan Allen Interiors on August 28, 2024 and sell it today you would earn a total of 166.00 from holding Ethan Allen Interiors or generate 5.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Kimball International vs. Ethan Allen Interiors
Performance |
| Timeline |
| Kimball International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ethan Allen Interiors |
Kimball International and Ethan Allen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kimball International and Ethan Allen
The main advantage of trading using opposite Kimball International and Ethan Allen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimball International position performs unexpectedly, Ethan Allen 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 Ethan Allen will offset losses from the drop in Ethan Allen's long position.| Kimball International vs. Kimball Electronics | Kimball International vs. Interface | Kimball International vs. James River Group | Kimball International vs. Midland States Bancorp |
| Ethan Allen vs. Willis Lease Finance | Ethan Allen vs. Rocky Brands | Ethan Allen vs. First Business Financial |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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