Correlation Between Kimball Electronics and CDW Corp
Can any of the company-specific risk be diversified away by investing in both Kimball Electronics and CDW Corp 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 CDW Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kimball Electronics and CDW Corp, you can compare the effects of market volatilities on Kimball Electronics and CDW Corp 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 CDW Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimball Electronics and CDW Corp.
Diversification Opportunities for Kimball Electronics and CDW Corp
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kimball and CDW is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Kimball Electronics and CDW Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDW Corp 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 CDW Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDW Corp has no effect on the direction of Kimball Electronics i.e., Kimball Electronics and CDW Corp go up and down completely randomly.
Pair Corralation between Kimball Electronics and CDW Corp
Allowing for the 90-day total investment horizon Kimball Electronics is expected to generate 1.44 times more return on investment than CDW Corp. However, Kimball Electronics is 1.44 times more volatile than CDW Corp. It trades about 0.11 of its potential returns per unit of risk. CDW Corp is currently generating about -0.14 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kimball Electronics vs. CDW Corp
Performance |
| Timeline |
| Kimball Electronics |
| CDW Corp |
Kimball Electronics and CDW Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kimball Electronics and CDW Corp
The main advantage of trading using opposite Kimball Electronics and CDW Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimball Electronics position performs unexpectedly, CDW Corp 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 CDW Corp will offset losses from the drop in CDW Corp's long position.| Kimball Electronics vs. Fabrinet | Kimball Electronics vs. Knowles Cor | Kimball Electronics vs. Ubiquiti Networks | Kimball Electronics vs. Viavi Solutions |
| CDW Corp vs. Fabrinet | CDW Corp vs. Kimball Electronics | CDW Corp vs. Knowles Cor | CDW Corp vs. Ubiquiti Networks |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |