Correlation Between KIMBALL ELECTRONICS and ENN ENERGY

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

By analyzing existing cross correlation between KIMBALL ELECTRONICS and ENN ENERGY HLDUNSADR25, you can compare the effects of market volatilities on KIMBALL ELECTRONICS and ENN ENERGY 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 ENN ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMBALL ELECTRONICS and ENN ENERGY.

Diversification Opportunities for KIMBALL ELECTRONICS and ENN ENERGY

-0.17

Correlation Coefficient

KIMBALL ELECTRONICS  ENN ENERGY

Good diversification

The 3 months correlation between KIMBALL and ENN is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS and ENN ENERGY HLDUNSADR25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENN ENERGY HLDUNSADR25 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 ENN ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENN ENERGY HLDUNSADR25 has no effect on the direction of KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and ENN ENERGY go up and down completely randomly.

Pair Corralation between KIMBALL ELECTRONICS and ENN ENERGY

Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to under-perform the ENN ENERGY. But the stock apears to be less risky and, when comparing its historical volatility, KIMBALL ELECTRONICS is 1.3 times less risky than ENN ENERGY. The stock trades about -0.01 of its potential returns per unit of risk. The ENN ENERGY HLDUNSADR25 is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  2,560  in ENN ENERGY HLDUNSADR25 on October 10, 2024 and sell it today you would earn a total of  140.00  from holding ENN ENERGY HLDUNSADR25 or generate 5.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

KIMBALL ELECTRONICS  vs.  ENN ENERGY HLDUNSADR25

KIMBALL ELECTRONICS

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in KIMBALL ELECTRONICS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, KIMBALL ELECTRONICS reported solid returns over the last few months and may actually be approaching a breakup point.

ENN ENERGY HLDUNSADR25

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ENN ENERGY HLDUNSADR25 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, ENN ENERGY may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with KIMBALL ELECTRONICS and ENN ENERGY

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

The idea behind KIMBALL ELECTRONICS and ENN ENERGY HLDUNSADR25 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.