Correlation Between ADRIATIC METALS and KIMBALL ELECTRONICS

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

By analyzing existing cross correlation between ADRIATIC METALS LS 013355 and KIMBALL ELECTRONICS, you can compare the effects of market volatilities on ADRIATIC METALS 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 ADRIATIC METALS with a short position of KIMBALL ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADRIATIC METALS and KIMBALL ELECTRONICS.

Diversification Opportunities for ADRIATIC METALS and KIMBALL ELECTRONICS

0.53

Correlation Coefficient

ADRIATIC METALS  KIMBALL ELECTRONICS

Very weak diversification

The 3 months correlation between ADRIATIC and KIMBALL is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding ADRIATIC METALS LS 013355 and KIMBALL ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIMBALL ELECTRONICS and ADRIATIC METALS 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 ADRIATIC METALS LS 013355 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 ADRIATIC METALS i.e., ADRIATIC METALS and KIMBALL ELECTRONICS go up and down completely randomly.

Pair Corralation between ADRIATIC METALS and KIMBALL ELECTRONICS

Assuming the 90 days trading horizon ADRIATIC METALS LS 013355 is expected to generate 1.53 times more return on investment than KIMBALL ELECTRONICS. However, ADRIATIC METALS is 1.53 times more volatile than KIMBALL ELECTRONICS. It trades about 0.15 of its potential returns per unit of risk. KIMBALL ELECTRONICS is currently generating about 0.06 per unit of risk. If you would invest  172.00  in ADRIATIC METALS LS 013355 on September 3, 2024 and sell it today you would earn a total of  74.00  from holding ADRIATIC METALS LS 013355 or generate 43.02% return on investment over 90 days.

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

ADRIATIC METALS LS 013355  vs.  KIMBALL ELECTRONICS

ADRIATIC METALS LS

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ADRIATIC METALS LS 013355 are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ADRIATIC METALS reported solid returns over the last few months and may actually be approaching a breakup point.

KIMBALL ELECTRONICS

Risk-Adjusted Performance

4 of 100

Insignificant

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

Pair Trading with ADRIATIC METALS and KIMBALL ELECTRONICS

The main advantage of trading using opposite ADRIATIC METALS and KIMBALL ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADRIATIC METALS 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's long position.

The idea behind ADRIATIC METALS LS 013355 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.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.