Correlation Between KIMBALL ELECTRONICS and Stockland

Can any of the company-specific risk be diversified away by investing in both KIMBALL ELECTRONICS and Stockland 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 Stockland into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KIMBALL ELECTRONICS and Stockland, you can compare the effects of market volatilities on KIMBALL ELECTRONICS and Stockland 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 Stockland. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMBALL ELECTRONICS and Stockland.

Diversification Opportunities for KIMBALL ELECTRONICS and Stockland

0.12

Correlation Coefficient

KIMBALL ELECTRONICS  Stockland

Average diversification

The 3 months correlation between KIMBALL and Stockland is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS and Stockland in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stockland 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 Stockland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stockland has no effect on the direction of KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and Stockland go up and down completely randomly.

Pair Corralation between KIMBALL ELECTRONICS and Stockland

Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to under-perform the Stockland. In addition to that, KIMBALL ELECTRONICS is 1.5 times more volatile than Stockland. It trades about -0.07 of its total potential returns per unit of risk. Stockland is currently generating about 0.01 per unit of volatility. If you would invest  277.00  in Stockland on December 22, 2024 and sell it today you would earn a total of  0.00  from holding Stockland or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

KIMBALL ELECTRONICS  vs.  Stockland

KIMBALL ELECTRONICS

Risk-Adjusted Performance

Very Weak

Over the last 90 days KIMBALL ELECTRONICS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Stockland

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stockland has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Stockland is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with KIMBALL ELECTRONICS and Stockland

The main advantage of trading using opposite KIMBALL ELECTRONICS and Stockland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIMBALL ELECTRONICS position performs unexpectedly, Stockland 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 Stockland will offset losses from the drop in Stockland's long position.

The idea behind KIMBALL ELECTRONICS and Stockland 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.