Correlation Between Kimball Electronics and Zepp Health
Can any of the company-specific risk be diversified away by investing in both Kimball Electronics and Zepp Health 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 Zepp Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kimball Electronics and Zepp Health Corp, you can compare the effects of market volatilities on Kimball Electronics and Zepp Health 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 Zepp Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimball Electronics and Zepp Health.
Diversification Opportunities for Kimball Electronics and Zepp Health
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kimball and Zepp is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Kimball Electronics and Zepp Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zepp Health 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 Zepp Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zepp Health Corp has no effect on the direction of Kimball Electronics i.e., Kimball Electronics and Zepp Health go up and down completely randomly.
Pair Corralation between Kimball Electronics and Zepp Health
Allowing for the 90-day total investment horizon Kimball Electronics is expected to under-perform the Zepp Health. But the stock apears to be less risky and, when comparing its historical volatility, Kimball Electronics is 2.16 times less risky than Zepp Health. The stock trades about -0.04 of its potential returns per unit of risk. The Zepp Health Corp is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 456.00 in Zepp Health Corp on September 12, 2024 and sell it today you would lose (148.00) from holding Zepp Health Corp or give up 32.46% 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. Zepp Health Corp
Performance |
| Timeline |
| Kimball Electronics |
| Zepp Health Corp |
Kimball Electronics and Zepp Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kimball Electronics and Zepp Health
The main advantage of trading using opposite Kimball Electronics and Zepp Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimball Electronics position performs unexpectedly, Zepp Health 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 Zepp Health will offset losses from the drop in Zepp Health'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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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