Correlation Between Kimball Electronics and ADS TEC
Can any of the company-specific risk be diversified away by investing in both Kimball Electronics and ADS TEC 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 ADS TEC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kimball Electronics and ADS TEC ENERGY PLC, you can compare the effects of market volatilities on Kimball Electronics and ADS TEC 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 ADS TEC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimball Electronics and ADS TEC.
Diversification Opportunities for Kimball Electronics and ADS TEC
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kimball and ADS is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Kimball Electronics and ADS TEC ENERGY PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADS TEC ENERGY 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 ADS TEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADS TEC ENERGY has no effect on the direction of Kimball Electronics i.e., Kimball Electronics and ADS TEC go up and down completely randomly.
Pair Corralation between Kimball Electronics and ADS TEC
Allowing for the 90-day total investment horizon Kimball Electronics is expected to generate 0.72 times more return on investment than ADS TEC. However, Kimball Electronics is 1.39 times less risky than ADS TEC. It trades about 0.11 of its potential returns per unit of risk. ADS TEC ENERGY PLC is currently generating about -0.03 per unit of risk. If you would invest 1,847 in Kimball Electronics on September 5, 2024 and sell it today you would earn a total of 110.00 from holding Kimball Electronics or generate 5.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kimball Electronics vs. ADS TEC ENERGY PLC
Performance |
| Timeline |
| Kimball Electronics |
| ADS TEC ENERGY |
Kimball Electronics and ADS TEC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kimball Electronics and ADS TEC
The main advantage of trading using opposite Kimball Electronics and ADS TEC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimball Electronics position performs unexpectedly, ADS TEC 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 ADS TEC will offset losses from the drop in ADS TEC's long position.| Kimball Electronics vs. Fabrinet | Kimball Electronics vs. Knowles Cor | Kimball Electronics vs. Ubiquiti Networks | Kimball Electronics vs. Viavi Solutions |
| ADS TEC vs. Espey Mfg Electronics | ADS TEC vs. Kimball Electronics | ADS TEC vs. Hayward Holdings | ADS TEC vs. Polar Power |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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