Correlation Between Knowles Cor and Kimball Electronics
Can any of the company-specific risk be diversified away by investing in both Knowles Cor 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 Knowles Cor and Kimball Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knowles Cor and Kimball Electronics, you can compare the effects of market volatilities on Knowles Cor 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 Knowles Cor with a short position of Kimball Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knowles Cor and Kimball Electronics.
Diversification Opportunities for Knowles Cor and Kimball Electronics
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Knowles and Kimball is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Knowles Cor and Kimball Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimball Electronics and Knowles Cor 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 Knowles Cor 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 Knowles Cor i.e., Knowles Cor and Kimball Electronics go up and down completely randomly.
Pair Corralation between Knowles Cor and Kimball Electronics
Allowing for the 90-day total investment horizon Knowles Cor is expected to generate 1.17 times more return on investment than Kimball Electronics. However, Knowles Cor is 1.17 times more volatile than Kimball Electronics. It trades about 0.06 of its potential returns per unit of risk. Kimball Electronics is currently generating about 0.06 per unit of risk. If you would invest 1,534 in Knowles Cor on January 24, 2024 and sell it today you would earn a total of 26.00 from holding Knowles Cor or generate 1.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Knowles Cor vs. Kimball Electronics
Performance |
Timeline |
Knowles Cor |
Kimball Electronics |
Knowles Cor and Kimball Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Knowles Cor and Kimball Electronics
The main advantage of trading using opposite Knowles Cor and Kimball Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knowles Cor 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.Knowles Cor vs. Mynaric AG ADR | Knowles Cor vs. Comtech Telecommunications Corp | Knowles Cor vs. Ituran Location and | Knowles Cor vs. Aviat Networks |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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