Correlation Between Fortune Brands and Kimball International
Can any of the company-specific risk be diversified away by investing in both Fortune Brands 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 Fortune Brands and Kimball International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortune Brands Home and Kimball International, you can compare the effects of market volatilities on Fortune Brands 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 Fortune Brands with a short position of Kimball International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortune Brands and Kimball International.
Diversification Opportunities for Fortune Brands and Kimball International
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fortune and Kimball is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Fortune Brands Home and Kimball International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimball International and Fortune Brands 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 Fortune Brands Home 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 Fortune Brands i.e., Fortune Brands and Kimball International go up and down completely randomly.
Pair Corralation between Fortune Brands and Kimball International
If you would invest 686.00 in Kimball International on January 25, 2024 and sell it today you would earn a total of 544.00 from holding Kimball International or generate 79.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Fortune Brands Home vs. Kimball International
Performance |
| Timeline |
| Fortune Brands Home |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Kimball International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fortune Brands and Kimball International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortune Brands and Kimball International
The main advantage of trading using opposite Fortune Brands and Kimball International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortune Brands 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.| Fortune Brands vs. National Beverage Corp | Fortune Brands vs. Entegris | Fortune Brands vs. IPG Photonics | Fortune Brands vs. Ambev SA ADR |
| Kimball International vs. Kimball Electronics | Kimball International vs. Interface | Kimball International vs. James River Group | Kimball International vs. Lakeland 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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