Correlation Between Kimball International and La Z

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Can any of the company-specific risk be diversified away by investing in both Kimball International and La Z 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 International and La Z into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kimball International and La Z Boy Incorporated, you can compare the effects of market volatilities on Kimball International and La Z 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 International with a short position of La Z. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimball International and La Z.

Diversification Opportunities for Kimball International and La Z

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Kimball and LZB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kimball International and La Z Boy Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on La Z Boy and Kimball International 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 International are associated (or correlated) with La Z. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of La Z Boy has no effect on the direction of Kimball International i.e., Kimball International and La Z go up and down completely randomly.

Pair Corralation between Kimball International and La Z

If you would invest  4,505  in La Z Boy Incorporated on November 28, 2024 and sell it today you would earn a total of  155.50  from holding La Z Boy Incorporated or generate 3.45% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Kimball International  vs.  La Z Boy Incorporated

 Performance 
       Timeline  
Kimball International 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Kimball International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Kimball International is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
La Z Boy 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in La Z Boy Incorporated are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, La Z is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kimball International and La Z Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kimball International and La Z

The main advantage of trading using opposite Kimball International and La Z positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimball International position performs unexpectedly, La Z 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 La Z will offset losses from the drop in La Z's long position.
The idea behind Kimball International and La Z Boy Incorporated 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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