Correlation Between Interface and Kimball International
Can any of the company-specific risk be diversified away by investing in both Interface 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 Interface and Kimball International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interface and Kimball International, you can compare the effects of market volatilities on Interface 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 Interface with a short position of Kimball International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interface and Kimball International.
Diversification Opportunities for Interface and Kimball International
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Interface and Kimball is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Interface and Kimball International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimball International and Interface 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 Interface 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 Interface i.e., Interface and Kimball International go up and down completely randomly.
Pair Corralation between Interface and Kimball International
Given the investment horizon of 90 days Interface is expected to generate 3.1 times less return on investment than Kimball International. But when comparing it to its historical volatility, Interface is 2.6 times less risky than Kimball International. It trades about 0.07 of its potential returns per unit of risk. Kimball International is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 670.00 in Kimball International on August 24, 2024 and sell it today you would earn a total of 560.00 from holding Kimball International or generate 83.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 25.81% |
| Values | Daily Returns |
Interface vs. Kimball International
Performance |
| Timeline |
| Interface |
| Kimball International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Interface and Kimball International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interface and Kimball International
The main advantage of trading using opposite Interface and Kimball International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interface 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.| Interface vs. Quanex Building Products | Interface vs. Janus International Group | Interface vs. Apogee Enterprises | Interface vs. Gibraltar Industries |
| 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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