Correlation Between Kimball Electronics and Acuity Brands
Can any of the company-specific risk be diversified away by investing in both Kimball Electronics and Acuity Brands 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 Acuity Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kimball Electronics and Acuity Brands, you can compare the effects of market volatilities on Kimball Electronics and Acuity Brands 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 Acuity Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimball Electronics and Acuity Brands.
Diversification Opportunities for Kimball Electronics and Acuity Brands
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kimball and Acuity is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Kimball Electronics and Acuity Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acuity Brands 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 Acuity Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acuity Brands has no effect on the direction of Kimball Electronics i.e., Kimball Electronics and Acuity Brands go up and down completely randomly.
Pair Corralation between Kimball Electronics and Acuity Brands
Allowing for the 90-day total investment horizon Kimball Electronics is expected to generate 1.65 times less return on investment than Acuity Brands. In addition to that, Kimball Electronics is 1.19 times more volatile than Acuity Brands. It trades about 0.02 of its total potential returns per unit of risk. Acuity Brands is currently generating about 0.05 per unit of volatility. If you would invest 17,213 in Acuity Brands on January 20, 2024 and sell it today you would earn a total of 7,493 from holding Acuity Brands or generate 43.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kimball Electronics vs. Acuity Brands
Performance |
| Timeline |
| Kimball Electronics |
| Acuity Brands |
Kimball Electronics and Acuity Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kimball Electronics and Acuity Brands
The main advantage of trading using opposite Kimball Electronics and Acuity Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimball Electronics position performs unexpectedly, Acuity Brands 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 Acuity Brands will offset losses from the drop in Acuity Brands' long position.| Kimball Electronics vs. Maximus | Kimball Electronics vs. Network 1 Technologies | Kimball Electronics vs. First Advantage Corp | Kimball Electronics vs. BrightView Holdings |
| Acuity Brands vs. Bloom Energy Corp | Acuity Brands vs. Microvast Holdings | Acuity Brands vs. Solid Power | Acuity Brands vs. FREYR Battery SA |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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