Correlation Between Kimball Electronics and Comtech Telecommunicatio

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Can any of the company-specific risk be diversified away by investing in both Kimball Electronics and Comtech Telecommunicatio 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 Comtech Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kimball Electronics and Comtech Telecommunications Corp, you can compare the effects of market volatilities on Kimball Electronics and Comtech Telecommunicatio 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 Comtech Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimball Electronics and Comtech Telecommunicatio.

Diversification Opportunities for Kimball Electronics and Comtech Telecommunicatio

-0.26
  Correlation Coefficient

Very good diversification

The 3 months correlation between Kimball and Comtech is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Kimball Electronics and Comtech Telecommunications Cor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comtech Telecommunicatio 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 Comtech Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comtech Telecommunicatio has no effect on the direction of Kimball Electronics i.e., Kimball Electronics and Comtech Telecommunicatio go up and down completely randomly.

Pair Corralation between Kimball Electronics and Comtech Telecommunicatio

Allowing for the 90-day total investment horizon Kimball Electronics is expected to generate 0.13 times more return on investment than Comtech Telecommunicatio. However, Kimball Electronics is 7.74 times less risky than Comtech Telecommunicatio. It trades about -0.05 of its potential returns per unit of risk. Comtech Telecommunications Corp is currently generating about -0.22 per unit of risk. If you would invest  1,839  in Kimball Electronics on November 2, 2024 and sell it today you would lose (28.00) from holding Kimball Electronics or give up 1.52% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Kimball Electronics  vs.  Comtech Telecommunications Cor

 Performance 
       Timeline  
Kimball Electronics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Kimball Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Kimball Electronics is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.
Comtech Telecommunicatio 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Very Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Comtech Telecommunications Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Comtech Telecommunicatio may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Kimball Electronics and Comtech Telecommunicatio Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kimball Electronics and Comtech Telecommunicatio

The main advantage of trading using opposite Kimball Electronics and Comtech Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimball Electronics position performs unexpectedly, Comtech Telecommunicatio 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 Comtech Telecommunicatio will offset losses from the drop in Comtech Telecommunicatio's long position.
The idea behind Kimball Electronics and Comtech Telecommunications Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.

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