Correlation Between KIMBALL ELECTRONICS and Delta Electronics
Can any of the company-specific risk be diversified away by investing in both KIMBALL ELECTRONICS and Delta 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 KIMBALL ELECTRONICS and Delta Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KIMBALL ELECTRONICS and Delta Electronics Public, you can compare the effects of market volatilities on KIMBALL ELECTRONICS and Delta 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 KIMBALL ELECTRONICS with a short position of Delta Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMBALL ELECTRONICS and Delta Electronics.
Diversification Opportunities for KIMBALL ELECTRONICS and Delta Electronics
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between KIMBALL and Delta is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS and Delta Electronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Electronics Public 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 Delta Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Electronics Public has no effect on the direction of KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and Delta Electronics go up and down completely randomly.
Pair Corralation between KIMBALL ELECTRONICS and Delta Electronics
Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to under-perform the Delta Electronics. But the stock apears to be less risky and, when comparing its historical volatility, KIMBALL ELECTRONICS is 2.0 times less risky than Delta Electronics. The stock trades about -0.18 of its potential returns per unit of risk. The Delta Electronics Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 394.00 in Delta Electronics Public on September 26, 2024 and sell it today you would earn a total of 14.00 from holding Delta Electronics Public or generate 3.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
KIMBALL ELECTRONICS vs. Delta Electronics Public
Performance |
Timeline |
KIMBALL ELECTRONICS |
Delta Electronics Public |
KIMBALL ELECTRONICS and Delta Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KIMBALL ELECTRONICS and Delta Electronics
The main advantage of trading using opposite KIMBALL ELECTRONICS and Delta Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIMBALL ELECTRONICS position performs unexpectedly, Delta 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 Delta Electronics will offset losses from the drop in Delta Electronics' long position.KIMBALL ELECTRONICS vs. Delta Electronics Public | KIMBALL ELECTRONICS vs. YASKAWA ELEC UNSP | KIMBALL ELECTRONICS vs. Plug Power | KIMBALL ELECTRONICS vs. VERTIV HOLCL A |
Delta Electronics vs. YASKAWA ELEC UNSP | Delta Electronics vs. Plug Power | Delta Electronics vs. VERTIV HOLCL A | Delta Electronics vs. Bloom Energy |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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