Correlation Between Natural Health and KIMBALL ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both Natural Health 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 Natural Health and KIMBALL ELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Health Trends and KIMBALL ELECTRONICS, you can compare the effects of market volatilities on Natural Health 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 Natural Health with a short position of KIMBALL ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Health and KIMBALL ELECTRONICS.
Diversification Opportunities for Natural Health and KIMBALL ELECTRONICS
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Natural and KIMBALL is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Natural Health Trends and KIMBALL ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIMBALL ELECTRONICS and Natural Health 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 Natural Health Trends 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 Natural Health i.e., Natural Health and KIMBALL ELECTRONICS go up and down completely randomly.
Pair Corralation between Natural Health and KIMBALL ELECTRONICS
Assuming the 90 days trading horizon Natural Health Trends is expected to under-perform the KIMBALL ELECTRONICS. But the stock apears to be less risky and, when comparing its historical volatility, Natural Health Trends is 1.09 times less risky than KIMBALL ELECTRONICS. The stock trades about -0.1 of its potential returns per unit of risk. The KIMBALL ELECTRONICS is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 2,020 in KIMBALL ELECTRONICS on September 27, 2024 and sell it today you would lose (280.00) from holding KIMBALL ELECTRONICS or give up 13.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Health Trends vs. KIMBALL ELECTRONICS
Performance |
| Timeline |
| Natural Health Trends |
| KIMBALL ELECTRONICS |
Natural Health and KIMBALL ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Health and KIMBALL ELECTRONICS
The main advantage of trading using opposite Natural Health and KIMBALL ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Health 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.| Natural Health vs. COSTCO WHOLESALE CDR | Natural Health vs. Caltagirone SpA | Natural Health vs. CosmoSteel Holdings Limited | Natural Health vs. United States Steel |
| KIMBALL ELECTRONICS vs. Delta Electronics Public | KIMBALL ELECTRONICS vs. YASKAWA ELEC UNSP | KIMBALL ELECTRONICS vs. Plug Power | KIMBALL ELECTRONICS vs. VERTIV HOLCL A |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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