Correlation Between Polar Power and Kimball Electronics
Can any of the company-specific risk be diversified away by investing in both Polar Power 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 Polar Power and Kimball Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polar Power and Kimball Electronics, you can compare the effects of market volatilities on Polar Power 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 Polar Power with a short position of Kimball Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polar Power and Kimball Electronics.
Diversification Opportunities for Polar Power and Kimball Electronics
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Polar and Kimball is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Polar Power and Kimball Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimball Electronics and Polar Power 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 Polar Power 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 Polar Power i.e., Polar Power and Kimball Electronics go up and down completely randomly.
Pair Corralation between Polar Power and Kimball Electronics
Given the investment horizon of 90 days Polar Power is expected to generate 2.96 times more return on investment than Kimball Electronics. However, Polar Power is 2.96 times more volatile than Kimball Electronics. It trades about 0.1 of its potential returns per unit of risk. Kimball Electronics is currently generating about 0.16 per unit of risk. If you would invest 304.00 in Polar Power on August 27, 2024 and sell it today you would earn a total of 34.00 from holding Polar Power or generate 11.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Polar Power vs. Kimball Electronics
Performance |
| Timeline |
| Polar Power |
| Kimball Electronics |
Polar Power and Kimball Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polar Power and Kimball Electronics
The main advantage of trading using opposite Polar Power and Kimball Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polar Power 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' long position.| Polar Power vs. Plug Power | Polar Power vs. Microvast Holdings | Polar Power vs. Solid Power | Polar Power vs. CBAK Energy Technology |
| Kimball Electronics vs. Hayward Holdings | Kimball Electronics vs. Enersys | Kimball Electronics vs. Espey Mfg Electronics | Kimball Electronics vs. Advanced Energy Industries |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |