Correlation Between Kimball Electronics and ClearOne
Can any of the company-specific risk be diversified away by investing in both Kimball Electronics and ClearOne 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 ClearOne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kimball Electronics and ClearOne, you can compare the effects of market volatilities on Kimball Electronics and ClearOne 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 ClearOne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimball Electronics and ClearOne.
Diversification Opportunities for Kimball Electronics and ClearOne
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kimball and ClearOne is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Kimball Electronics and ClearOne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearOne 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 ClearOne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClearOne has no effect on the direction of Kimball Electronics i.e., Kimball Electronics and ClearOne go up and down completely randomly.
Pair Corralation between Kimball Electronics and ClearOne
Allowing for the 90-day total investment horizon Kimball Electronics is expected to under-perform the ClearOne. But the stock apears to be less risky and, when comparing its historical volatility, Kimball Electronics is 2.98 times less risky than ClearOne. The stock trades about -0.21 of its potential returns per unit of risk. The ClearOne is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 50.00 in ClearOne on September 23, 2024 and sell it today you would earn a total of 11.00 from holding ClearOne or generate 22.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kimball Electronics vs. ClearOne
Performance |
| Timeline |
| Kimball Electronics |
| ClearOne |
Kimball Electronics and ClearOne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kimball Electronics and ClearOne
The main advantage of trading using opposite Kimball Electronics and ClearOne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimball Electronics position performs unexpectedly, ClearOne 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 ClearOne will offset losses from the drop in ClearOne's long position.| Kimball Electronics vs. Rigetti Computing | Kimball Electronics vs. Quantum Computing | Kimball Electronics vs. IONQ Inc | Kimball Electronics vs. Quantum |
| ClearOne vs. Desktop Metal | ClearOne vs. Fabrinet | ClearOne vs. Kimball Electronics | ClearOne vs. Knowles Cor |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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