Correlation Between Kimball Electronics and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Kimball Electronics and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kimball Electronics and Dow Jones Industrial, you can compare the effects of market volatilities on Kimball Electronics and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimball Electronics and Dow Jones.
Diversification Opportunities for Kimball Electronics and Dow Jones
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kimball and Dow is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kimball Electronics and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Kimball Electronics i.e., Kimball Electronics and Dow Jones go up and down completely randomly.
Pair Corralation between Kimball Electronics and Dow Jones
Allowing for the 90-day total investment horizon Kimball Electronics is expected to generate 2.76 times more return on investment than Dow Jones. However, Kimball Electronics is 2.76 times more volatile than Dow Jones Industrial. It trades about 0.18 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.15 per unit of risk. If you would invest 1,768 in Kimball Electronics on August 24, 2024 and sell it today you would earn a total of 187.00 from holding Kimball Electronics or generate 10.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kimball Electronics vs. Dow Jones Industrial
Performance |
| Timeline |
Kimball Electronics and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Kimball Electronics
Pair trading matchups for Kimball Electronics
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Kimball Electronics and Dow Jones
The main advantage of trading using opposite Kimball Electronics and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimball Electronics position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Kimball Electronics vs. Hayward Holdings | Kimball Electronics vs. Enersys | Kimball Electronics vs. Espey Mfg Electronics | Kimball Electronics vs. Advanced Energy Industries |
| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |