Correlation Between AM EAGLE and KIMBALL ELECTRONICS

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

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

Diversification Opportunities for AM EAGLE and KIMBALL ELECTRONICS

-0.53

Correlation Coefficient

AM EAGLE  KIMBALL ELECTRONICS

Excellent diversification

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

Pair Corralation between AM EAGLE and KIMBALL ELECTRONICS

Assuming the 90 days trading horizon AM EAGLE OUTFITTERS is expected to under-perform the KIMBALL ELECTRONICS. In addition to that, AM EAGLE is 1.24 times more volatile than KIMBALL ELECTRONICS. It trades about -0.09 of its total potential returns per unit of risk. KIMBALL ELECTRONICS is currently generating about -0.03 per unit of volatility. If you would invest  1,790  in KIMBALL ELECTRONICS on October 8, 2024 and sell it today you would lose (20.00) from holding KIMBALL ELECTRONICS or give up 1.12% of portfolio value over 90 days.

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

AM EAGLE OUTFITTERS  vs.  KIMBALL ELECTRONICS

AM EAGLE OUTFITTERS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AM EAGLE OUTFITTERS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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 unsteady basic indicators, KIMBALL ELECTRONICS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AM EAGLE and KIMBALL ELECTRONICS

The main advantage of trading using opposite AM EAGLE and KIMBALL ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AM EAGLE 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 AM EAGLE OUTFITTERS 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.