Correlation Between Kimball Electronics and Digi International
Can any of the company-specific risk be diversified away by investing in both Kimball Electronics and Digi 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 Kimball Electronics and Digi International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kimball Electronics and Digi International, you can compare the effects of market volatilities on Kimball Electronics and Digi 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 Kimball Electronics with a short position of Digi International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimball Electronics and Digi International.
Diversification Opportunities for Kimball Electronics and Digi International
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kimball and Digi is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Kimball Electronics and Digi International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digi International 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 Digi International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digi International has no effect on the direction of Kimball Electronics i.e., Kimball Electronics and Digi International go up and down completely randomly.
Pair Corralation between Kimball Electronics and Digi International
Allowing for the 90-day total investment horizon Kimball Electronics is expected to generate 0.54 times more return on investment than Digi International. However, Kimball Electronics is 1.85 times less risky than Digi International. It trades about 0.03 of its potential returns per unit of risk. Digi International is currently generating about -0.05 per unit of risk. If you would invest 2,214 in Kimball Electronics on February 20, 2024 and sell it today you would earn a total of 42.00 from holding Kimball Electronics or generate 1.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.46% |
Values | Daily Returns |
Kimball Electronics vs. Digi International
Performance |
Timeline |
Kimball Electronics |
Digi International |
Kimball Electronics and Digi International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kimball Electronics and Digi International
The main advantage of trading using opposite Kimball Electronics and Digi International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimball Electronics position performs unexpectedly, Digi 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 Digi International will offset losses from the drop in Digi International's long position.Kimball Electronics vs. Hayward Holdings | Kimball Electronics vs. Hollysys Automation Technologies | Kimball Electronics vs. Enersys | Kimball Electronics vs. Espey Mfg Electronics |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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