Correlation Between Kimball Electronics and Pure Storage
Can any of the company-specific risk be diversified away by investing in both Kimball Electronics and Pure Storage 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 Pure Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kimball Electronics and Pure Storage, you can compare the effects of market volatilities on Kimball Electronics and Pure Storage 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 Pure Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimball Electronics and Pure Storage.
Diversification Opportunities for Kimball Electronics and Pure Storage
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kimball and Pure is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Kimball Electronics and Pure Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pure Storage 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 Pure Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pure Storage has no effect on the direction of Kimball Electronics i.e., Kimball Electronics and Pure Storage go up and down completely randomly.
Pair Corralation between Kimball Electronics and Pure Storage
Allowing for the 90-day total investment horizon Kimball Electronics is expected to under-perform the Pure Storage. But the stock apears to be less risky and, when comparing its historical volatility, Kimball Electronics is 1.39 times less risky than Pure Storage. The stock trades about -0.01 of its potential returns per unit of risk. The Pure Storage is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,945 in Pure Storage on October 26, 2024 and sell it today you would earn a total of 4,292 from holding Pure Storage or generate 145.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kimball Electronics vs. Pure Storage
Performance |
| Timeline |
| Kimball Electronics |
| Pure Storage |
Kimball Electronics and Pure Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kimball Electronics and Pure Storage
The main advantage of trading using opposite Kimball Electronics and Pure Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimball Electronics position performs unexpectedly, Pure Storage 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 Pure Storage will offset losses from the drop in Pure Storage's long position.| Kimball Electronics vs. Hayward Holdings | Kimball Electronics vs. Enersys | Kimball Electronics vs. Espey Mfg Electronics | Kimball Electronics vs. Advanced Energy Industries |
| Pure Storage vs. Seagate Technology PLC | Pure Storage vs. HP Inc | Pure Storage vs. Dell Technologies | Pure Storage vs. Western Digital |
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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