Correlation Between Kimball Electronics and James River
Can any of the company-specific risk be diversified away by investing in both Kimball Electronics and James River 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 James River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kimball Electronics and James River Group, you can compare the effects of market volatilities on Kimball Electronics and James River 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 James River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimball Electronics and James River.
Diversification Opportunities for Kimball Electronics and James River
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kimball and James is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Kimball Electronics and James River Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on James River Group 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 James River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of James River Group has no effect on the direction of Kimball Electronics i.e., Kimball Electronics and James River go up and down completely randomly.
Pair Corralation between Kimball Electronics and James River
Allowing for the 90-day total investment horizon Kimball Electronics is expected to generate 0.65 times more return on investment than James River. However, Kimball Electronics is 1.55 times less risky than James River. It trades about -0.03 of its potential returns per unit of risk. James River Group is currently generating about -0.09 per unit of risk. If you would invest 2,226 in Kimball Electronics on September 3, 2024 and sell it today you would lose (265.00) from holding Kimball Electronics or give up 11.9% 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. James River Group
Performance |
| Timeline |
| Kimball Electronics |
| James River Group |
Kimball Electronics and James River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kimball Electronics and James River
The main advantage of trading using opposite Kimball Electronics and James River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimball Electronics position performs unexpectedly, James River 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 James River will offset losses from the drop in James River's long position.| Kimball Electronics vs. Hayward Holdings | Kimball Electronics vs. Enersys | Kimball Electronics vs. Espey Mfg Electronics | Kimball Electronics vs. Advanced Energy Industries |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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