Correlation Between Kimball Electronics and Advanced Energy
Can any of the company-specific risk be diversified away by investing in both Kimball Electronics and Advanced Energy 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 Advanced Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kimball Electronics and Advanced Energy Industries, you can compare the effects of market volatilities on Kimball Electronics and Advanced Energy 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 Advanced Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimball Electronics and Advanced Energy.
Diversification Opportunities for Kimball Electronics and Advanced Energy
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kimball and Advanced is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kimball Electronics and Advanced Energy Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Energy Indu 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 Advanced Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Energy Indu has no effect on the direction of Kimball Electronics i.e., Kimball Electronics and Advanced Energy go up and down completely randomly.
Pair Corralation between Kimball Electronics and Advanced Energy
Allowing for the 90-day total investment horizon Kimball Electronics is expected to under-perform the Advanced Energy. But the stock apears to be less risky and, when comparing its historical volatility, Kimball Electronics is 2.12 times less risky than Advanced Energy. The stock trades about -0.05 of its potential returns per unit of risk. The Advanced Energy Industries is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 11,534 in Advanced Energy Industries on November 2, 2024 and sell it today you would lose (53.00) from holding Advanced Energy Industries or give up 0.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kimball Electronics vs. Advanced Energy Industries
Performance |
| Timeline |
| Kimball Electronics |
| Advanced Energy Indu |
Kimball Electronics and Advanced Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kimball Electronics and Advanced Energy
The main advantage of trading using opposite Kimball Electronics and Advanced Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimball Electronics position performs unexpectedly, Advanced Energy 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 Advanced Energy will offset losses from the drop in Advanced Energy's long position.| Kimball Electronics vs. Rigetti Computing | Kimball Electronics vs. IONQ WT | Kimball Electronics vs. Arqit Quantum Warrants | Kimball Electronics vs. QBTS WT |
| Advanced Energy vs. MKS Instruments | Advanced Energy vs. Axcelis Technologies | Advanced Energy vs. Entegris | Advanced Energy vs. Cohu Inc |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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