Correlation Between Kimball Electronics and First Advantage
Can any of the company-specific risk be diversified away by investing in both Kimball Electronics and First Advantage 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 First Advantage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kimball Electronics and First Advantage Corp, you can compare the effects of market volatilities on Kimball Electronics and First Advantage 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 First Advantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimball Electronics and First Advantage.
Diversification Opportunities for Kimball Electronics and First Advantage
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kimball and First is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Kimball Electronics and First Advantage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Advantage 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 First Advantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Advantage Corp has no effect on the direction of Kimball Electronics i.e., Kimball Electronics and First Advantage go up and down completely randomly.
Pair Corralation between Kimball Electronics and First Advantage
Allowing for the 90-day total investment horizon Kimball Electronics is expected to generate 1.26 times less return on investment than First Advantage. But when comparing it to its historical volatility, Kimball Electronics is 1.01 times less risky than First Advantage. It trades about 0.11 of its potential returns per unit of risk. First Advantage Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,788 in First Advantage Corp on August 30, 2024 and sell it today you would earn a total of 140.00 from holding First Advantage Corp or generate 7.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kimball Electronics vs. First Advantage Corp
Performance |
| Timeline |
| Kimball Electronics |
| First Advantage Corp |
Kimball Electronics and First Advantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kimball Electronics and First Advantage
The main advantage of trading using opposite Kimball Electronics and First Advantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimball Electronics position performs unexpectedly, First Advantage 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 First Advantage will offset losses from the drop in First Advantage's long position.| Kimball Electronics vs. Fabrinet | Kimball Electronics vs. Knowles Cor | Kimball Electronics vs. Ubiquiti Networks | Kimball Electronics vs. AmpliTech Group |
| First Advantage vs. Manhattan Associates | First Advantage vs. Paycom Soft | First Advantage vs. Clearwater Analytics Holdings | First Advantage vs. Procore Technologies |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |