Correlation Between Delta Electronics and KIMBALL ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both Delta Electronics 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 Delta Electronics and KIMBALL ELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta Electronics Public and KIMBALL ELECTRONICS, you can compare the effects of market volatilities on Delta Electronics 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 Delta Electronics with a short position of KIMBALL ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Electronics and KIMBALL ELECTRONICS.
Diversification Opportunities for Delta Electronics and KIMBALL ELECTRONICS
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Delta and KIMBALL is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Delta Electronics Public and KIMBALL ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIMBALL ELECTRONICS and Delta 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 Delta Electronics Public 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 Delta Electronics i.e., Delta Electronics and KIMBALL ELECTRONICS go up and down completely randomly.
Pair Corralation between Delta Electronics and KIMBALL ELECTRONICS
Assuming the 90 days trading horizon Delta Electronics Public is expected to generate 0.94 times more return on investment than KIMBALL ELECTRONICS. However, Delta Electronics Public is 1.07 times less risky than KIMBALL ELECTRONICS. It trades about 0.24 of its potential returns per unit of risk. KIMBALL ELECTRONICS is currently generating about 0.12 per unit of risk. If you would invest 294.00 in Delta Electronics Public on August 28, 2024 and sell it today you would earn a total of 100.00 from holding Delta Electronics Public or generate 34.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Electronics Public vs. KIMBALL ELECTRONICS
Performance |
| Timeline |
| Delta Electronics Public |
| KIMBALL ELECTRONICS |
Delta Electronics and KIMBALL ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Electronics and KIMBALL ELECTRONICS
The main advantage of trading using opposite Delta Electronics and KIMBALL ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Electronics 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.| Delta Electronics vs. Fast Retailing Co | Delta Electronics vs. AUSNUTRIA DAIRY | Delta Electronics vs. GEAR4MUSIC LS 10 | Delta Electronics vs. UNIVERSAL MUSIC GROUP |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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