Correlation Between KIMBALL ELECTRONICS and Casio Computer

Can any of the company-specific risk be diversified away by investing in both KIMBALL ELECTRONICS and Casio Computer 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 KIMBALL ELECTRONICS and Casio Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KIMBALL ELECTRONICS and Casio Computer CoLtd, you can compare the effects of market volatilities on KIMBALL ELECTRONICS and Casio Computer 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 KIMBALL ELECTRONICS with a short position of Casio Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMBALL ELECTRONICS and Casio Computer.

Diversification Opportunities for KIMBALL ELECTRONICS and Casio Computer

-0.19

Correlation Coefficient

KIMBALL ELECTRONICS  Casio Computer

Good diversification

The 3 months correlation between KIMBALL and Casio is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS and Casio Computer CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casio Computer CoLtd and KIMBALL 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 KIMBALL ELECTRONICS are associated (or correlated) with Casio Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Casio Computer CoLtd has no effect on the direction of KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and Casio Computer go up and down completely randomly.

Pair Corralation between KIMBALL ELECTRONICS and Casio Computer

Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to generate 1.47 times more return on investment than Casio Computer. However, KIMBALL ELECTRONICS is 1.47 times more volatile than Casio Computer CoLtd. It trades about 0.0 of its potential returns per unit of risk. Casio Computer CoLtd is currently generating about -0.01 per unit of risk. If you would invest  2,120  in KIMBALL ELECTRONICS on September 20, 2024 and sell it today you would lose (370.00) from holding KIMBALL ELECTRONICS or give up 17.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

KIMBALL ELECTRONICS  vs.  Casio Computer CoLtd

KIMBALL ELECTRONICS

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in KIMBALL ELECTRONICS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, KIMBALL ELECTRONICS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Casio Computer CoLtd

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Casio Computer CoLtd are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Casio Computer may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with KIMBALL ELECTRONICS and Casio Computer

The main advantage of trading using opposite KIMBALL ELECTRONICS and Casio Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIMBALL ELECTRONICS position performs unexpectedly, Casio Computer 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 Casio Computer will offset losses from the drop in Casio Computer's long position.

The idea behind KIMBALL ELECTRONICS and Casio Computer CoLtd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.