Correlation Between MAG SILVER and KIMBALL ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both MAG SILVER and KIMBALL ELECTRONICS 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 MAG SILVER and KIMBALL ELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAG SILVER and KIMBALL ELECTRONICS, you can compare the effects of market volatilities on MAG SILVER and KIMBALL ELECTRONICS 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 MAG SILVER with a short position of KIMBALL ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG SILVER and KIMBALL ELECTRONICS.
Diversification Opportunities for MAG SILVER and KIMBALL ELECTRONICS
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MAG and KIMBALL is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding MAG SILVER and KIMBALL ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIMBALL ELECTRONICS and MAG SILVER 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 MAG SILVER are associated (or correlated) with KIMBALL ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIMBALL ELECTRONICS has no effect on the direction of MAG SILVER i.e., MAG SILVER and KIMBALL ELECTRONICS go up and down completely randomly.
Pair Corralation between MAG SILVER and KIMBALL ELECTRONICS
Assuming the 90 days trading horizon MAG SILVER is expected to generate 2.29 times more return on investment than KIMBALL ELECTRONICS. However, MAG SILVER is 2.29 times more volatile than KIMBALL ELECTRONICS. It trades about 0.28 of its potential returns per unit of risk. KIMBALL ELECTRONICS is currently generating about -0.08 per unit of risk. If you would invest 1,315 in MAG SILVER on November 3, 2024 and sell it today you would earn a total of 268.00 from holding MAG SILVER or generate 20.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAG SILVER vs. KIMBALL ELECTRONICS
Performance |
| Timeline |
| MAG SILVER |
| KIMBALL ELECTRONICS |
MAG SILVER and KIMBALL ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG SILVER and KIMBALL ELECTRONICS
The main advantage of trading using opposite MAG SILVER and KIMBALL ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG SILVER position performs unexpectedly, KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS will offset losses from the drop in KIMBALL ELECTRONICS's long position.| MAG SILVER vs. Tsingtao Brewery | MAG SILVER vs. Suntory Beverage Food | MAG SILVER vs. Sumitomo Rubber Industries | MAG SILVER vs. Plastic Omnium |
| KIMBALL ELECTRONICS vs. Suntory Beverage Food | KIMBALL ELECTRONICS vs. The Boston Beer | KIMBALL ELECTRONICS vs. Federal Agricultural Mortgage | KIMBALL ELECTRONICS vs. Hitachi Construction Machinery |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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