Correlation Between Kimball Electronics and Acco Brands
Can any of the company-specific risk be diversified away by investing in both Kimball Electronics and Acco Brands 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 Electronics and Acco Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kimball Electronics and Acco Brands, you can compare the effects of market volatilities on Kimball Electronics and Acco Brands 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 Electronics with a short position of Acco Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimball Electronics and Acco Brands.
Diversification Opportunities for Kimball Electronics and Acco Brands
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kimball and Acco is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kimball Electronics and Acco Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acco Brands and Kimball Electronics 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 Electronics are associated (or correlated) with Acco Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acco Brands has no effect on the direction of Kimball Electronics i.e., Kimball Electronics and Acco Brands go up and down completely randomly.
Pair Corralation between Kimball Electronics and Acco Brands
Allowing for the 90-day total investment horizon Kimball Electronics is expected to under-perform the Acco Brands. In addition to that, Kimball Electronics is 1.05 times more volatile than Acco Brands. It trades about -0.04 of its total potential returns per unit of risk. Acco Brands is currently generating about -0.01 per unit of volatility. If you would invest 565.00 in Acco Brands on November 9, 2024 and sell it today you would lose (55.00) from holding Acco Brands or give up 9.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kimball Electronics vs. Acco Brands
Performance |
| Timeline |
| Kimball Electronics |
| Acco Brands |
Kimball Electronics and Acco Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kimball Electronics and Acco Brands
The main advantage of trading using opposite Kimball Electronics and Acco Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimball Electronics position performs unexpectedly, Acco Brands 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 Acco Brands will offset losses from the drop in Acco Brands' long position.| Kimball Electronics vs. Hayward Holdings | Kimball Electronics vs. Enersys | Kimball Electronics vs. Espey Mfg Electronics | Kimball Electronics vs. Advanced Energy Industries |
| Acco Brands vs. HNI Corp | Acco Brands vs. Steelcase | Acco Brands vs. Ennis Inc | Acco Brands vs. Acacia Research |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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