Correlation Between Hollysys Automation and Kimball Electronics

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

By analyzing existing cross correlation between Hollysys Automation Technologies and Kimball Electronics, you can compare the effects of market volatilities on Hollysys Automation 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 Hollysys Automation with a short position of Kimball Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hollysys Automation and Kimball Electronics.

Diversification Opportunities for Hollysys Automation and Kimball Electronics

0.0

Correlation Coefficient

Hollysys Automation  Kimball Electronics

Pay attention - limited upside

The 3 months correlation between Hollysys and Kimball is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hollysys Automation Technologi and Kimball Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimball Electronics and Hollysys Automation 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 Hollysys Automation Technologies 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 Hollysys Automation i.e., Hollysys Automation and Kimball Electronics go up and down completely randomly.

Pair Corralation between Hollysys Automation and Kimball Electronics

If you would invest (100.00) in Hollysys Automation Technologies on November 28, 2024 and sell it today you would earn a total of  100.00  from holding Hollysys Automation Technologies or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Hollysys Automation Technologi  vs.  Kimball Electronics

Hollysys Automation

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hollysys Automation Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong essential indicators, Hollysys Automation is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

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. In spite of rather sound technical and fundamental indicators, Kimball Electronics is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Hollysys Automation and Kimball Electronics

The main advantage of trading using opposite Hollysys Automation and Kimball Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hollysys Automation 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.

The idea behind Hollysys Automation Technologies 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 Commodity Directory module to find actively traded commodities issued by global exchanges.