Correlation Between Purple Innovation and Kimball International
Can any of the company-specific risk be diversified away by investing in both Purple Innovation and Kimball International 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 Purple Innovation and Kimball International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Purple Innovation and Kimball International, you can compare the effects of market volatilities on Purple Innovation and Kimball International 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 Purple Innovation with a short position of Kimball International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Purple Innovation and Kimball International.
Diversification Opportunities for Purple Innovation and Kimball International
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Purple and Kimball is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Purple Innovation and Kimball International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimball International and Purple Innovation 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 Purple Innovation are associated (or correlated) with Kimball International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kimball International has no effect on the direction of Purple Innovation i.e., Purple Innovation and Kimball International go up and down completely randomly.
Pair Corralation between Purple Innovation and Kimball International
If you would invest 89.00 in Purple Innovation on August 31, 2024 and sell it today you would earn a total of 7.00 from holding Purple Innovation or generate 7.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Purple Innovation vs. Kimball International
Performance |
| Timeline |
| Purple Innovation |
| Kimball International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Purple Innovation and Kimball International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Purple Innovation and Kimball International
The main advantage of trading using opposite Purple Innovation and Kimball International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Purple Innovation position performs unexpectedly, Kimball International 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 International will offset losses from the drop in Kimball International's long position.| Purple Innovation vs. Tempur Sealy International | Purple Innovation vs. La Z Boy Incorporated | Purple Innovation vs. MasterBrand | Purple Innovation vs. Ethan Allen Interiors |
| Kimball International vs. Kimball Electronics | Kimball International vs. Interface | Kimball International vs. James River Group | Kimball International vs. Midland States Bancorp |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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