Correlation Between Eos Energy and Kimball Electronics

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Can any of the company-specific risk be diversified away by investing in both Eos Energy and Kimball 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 Eos Energy and Kimball Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eos Energy Enterprises and Kimball Electronics, you can compare the effects of market volatilities on Eos Energy and Kimball 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 Eos Energy with a short position of Kimball Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eos Energy and Kimball Electronics.

Diversification Opportunities for Eos Energy and Kimball Electronics

0.26
  Correlation Coefficient

Modest diversification

The 3 months correlation between Eos and Kimball is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Eos Energy Enterprises and Kimball Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimball Electronics and Eos Energy 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 Eos Energy Enterprises are associated (or correlated) with Kimball Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kimball Electronics has no effect on the direction of Eos Energy i.e., Eos Energy and Kimball Electronics go up and down completely randomly.

Pair Corralation between Eos Energy and Kimball Electronics

Given the investment horizon of 90 days Eos Energy Enterprises is expected to generate 3.28 times more return on investment than Kimball Electronics. However, Eos Energy is 3.28 times more volatile than Kimball Electronics. It trades about 0.01 of its potential returns per unit of risk. Kimball Electronics is currently generating about -0.01 per unit of risk. If you would invest  191.00  in Eos Energy Enterprises on December 1, 2023 and sell it today you would lose (92.00) from holding Eos Energy Enterprises or give up 48.17% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Eos Energy Enterprises  vs.  Kimball Electronics

 Performance 
       Timeline  
Eos Energy Enterprises 

Risk-Adjusted Performance

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High
Weak
Over the last 90 days Eos Energy Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Eos Energy is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
Kimball Electronics 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Kimball Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Eos Energy and Kimball Electronics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Eos Energy and Kimball Electronics

The main advantage of trading using opposite Eos Energy and Kimball Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eos Energy position performs unexpectedly, Kimball 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 Kimball Electronics will offset losses from the drop in Kimball Electronics' long position.
The idea behind Eos Energy Enterprises and Kimball Electronics 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.
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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