Correlation Between Penn National and KIMBALL ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both Penn National 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 Penn National and KIMBALL ELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Penn National Gaming and KIMBALL ELECTRONICS, you can compare the effects of market volatilities on Penn National 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 Penn National with a short position of KIMBALL ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and KIMBALL ELECTRONICS.
Diversification Opportunities for Penn National and KIMBALL ELECTRONICS
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Penn and KIMBALL is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and KIMBALL ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIMBALL ELECTRONICS and Penn National 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 Penn National Gaming 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 Penn National i.e., Penn National and KIMBALL ELECTRONICS go up and down completely randomly.
Pair Corralation between Penn National and KIMBALL ELECTRONICS
Assuming the 90 days horizon Penn National Gaming is expected to under-perform the KIMBALL ELECTRONICS. In addition to that, Penn National is 1.92 times more volatile than KIMBALL ELECTRONICS. It trades about -0.09 of its total potential returns per unit of risk. KIMBALL ELECTRONICS is currently generating about -0.01 per unit of volatility. If you would invest 1,780 in KIMBALL ELECTRONICS on October 15, 2024 and sell it today you would lose (10.00) from holding KIMBALL ELECTRONICS or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penn National Gaming vs. KIMBALL ELECTRONICS
Performance |
| Timeline |
| Penn National Gaming |
| KIMBALL ELECTRONICS |
Penn National and KIMBALL ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penn National and KIMBALL ELECTRONICS
The main advantage of trading using opposite Penn National and KIMBALL ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penn National 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.| Penn National vs. Astral Foods Limited | Penn National vs. CONTAGIOUS GAMING INC | Penn National vs. Tyson Foods | Penn National vs. INDOFOOD AGRI RES |
| KIMBALL ELECTRONICS vs. CNVISION MEDIA | KIMBALL ELECTRONICS vs. PDS Biotechnology Corp | KIMBALL ELECTRONICS vs. FRACTAL GAMING GROUP | KIMBALL ELECTRONICS vs. Penn National Gaming |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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