Correlation Between Kimball Electronics and Hayward Holdings
Can any of the company-specific risk be diversified away by investing in both Kimball Electronics and Hayward Holdings 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 Hayward Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kimball Electronics and Hayward Holdings, you can compare the effects of market volatilities on Kimball Electronics and Hayward Holdings 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 Hayward Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimball Electronics and Hayward Holdings.
Diversification Opportunities for Kimball Electronics and Hayward Holdings
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kimball and Hayward is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Kimball Electronics and Hayward Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hayward Holdings 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 Hayward Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hayward Holdings has no effect on the direction of Kimball Electronics i.e., Kimball Electronics and Hayward Holdings go up and down completely randomly.
Pair Corralation between Kimball Electronics and Hayward Holdings
Allowing for the 90-day total investment horizon Kimball Electronics is expected to under-perform the Hayward Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Kimball Electronics is 1.07 times less risky than Hayward Holdings. The stock trades about 0.0 of its potential returns per unit of risk. The Hayward Holdings is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 908.00 in Hayward Holdings on August 28, 2024 and sell it today you would earn a total of 732.00 from holding Hayward Holdings or generate 80.62% 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. Hayward Holdings
Performance |
| Timeline |
| Kimball Electronics |
| Hayward Holdings |
Kimball Electronics and Hayward Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kimball Electronics and Hayward Holdings
The main advantage of trading using opposite Kimball Electronics and Hayward Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimball Electronics position performs unexpectedly, Hayward Holdings 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 Hayward Holdings will offset losses from the drop in Hayward Holdings' long position.| Kimball Electronics vs. Hayward Holdings | Kimball Electronics vs. Enersys | Kimball Electronics vs. Espey Mfg Electronics | Kimball Electronics vs. Advanced Energy Industries |
| Hayward Holdings vs. Kimball Electronics | Hayward Holdings vs. Enersys | Hayward Holdings vs. Espey Mfg Electronics | Hayward Holdings vs. Energizer 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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