Correlation Between Kimball Electronics and FuelCell Energy
Can any of the company-specific risk be diversified away by investing in both Kimball Electronics and FuelCell Energy 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 FuelCell Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kimball Electronics and FuelCell Energy, you can compare the effects of market volatilities on Kimball Electronics and FuelCell Energy 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 FuelCell Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimball Electronics and FuelCell Energy.
Diversification Opportunities for Kimball Electronics and FuelCell Energy
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kimball and FuelCell is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Kimball Electronics and FuelCell Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelCell Energy 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 FuelCell Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FuelCell Energy has no effect on the direction of Kimball Electronics i.e., Kimball Electronics and FuelCell Energy go up and down completely randomly.
Pair Corralation between Kimball Electronics and FuelCell Energy
Allowing for the 90-day total investment horizon Kimball Electronics is expected to generate 0.37 times more return on investment than FuelCell Energy. However, Kimball Electronics is 2.68 times less risky than FuelCell Energy. It trades about -0.03 of its potential returns per unit of risk. FuelCell Energy is currently generating about -0.07 per unit of risk. If you would invest 2,500 in Kimball Electronics on August 27, 2024 and sell it today you would lose (530.00) from holding Kimball Electronics or give up 21.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kimball Electronics vs. FuelCell Energy
Performance |
| Timeline |
| Kimball Electronics |
| FuelCell Energy |
Kimball Electronics and FuelCell Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kimball Electronics and FuelCell Energy
The main advantage of trading using opposite Kimball Electronics and FuelCell Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimball Electronics position performs unexpectedly, FuelCell Energy 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 FuelCell Energy will offset losses from the drop in FuelCell Energy's long position.| Kimball Electronics vs. Hayward Holdings | Kimball Electronics vs. Enersys | Kimball Electronics vs. Espey Mfg Electronics | Kimball Electronics vs. Advanced Energy Industries |
| FuelCell Energy vs. Bloom Energy Corp | FuelCell Energy vs. Eos Energy Enterprises | FuelCell Energy vs. Sunrise New Energy | FuelCell Energy vs. Flux Power Holdings |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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