Correlation Between Kimball Electronics and BOS Better

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

By analyzing existing cross correlation between Kimball Electronics and BOS Better Online, you can compare the effects of market volatilities on Kimball Electronics and BOS Better 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 BOS Better. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimball Electronics and BOS Better.

Diversification Opportunities for Kimball Electronics and BOS Better

0.47

Correlation Coefficient

Kimball Electronics  BOS Better

Very weak diversification

The 3 months correlation between Kimball and BOS is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Kimball Electronics and BOS Better Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOS Better Online 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 BOS Better. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOS Better Online has no effect on the direction of Kimball Electronics i.e., Kimball Electronics and BOS Better go up and down completely randomly.

Pair Corralation between Kimball Electronics and BOS Better

Allowing for the 90-day total investment horizon Kimball Electronics is expected to generate 1.71 times less return on investment than BOS Better. In addition to that, Kimball Electronics is 1.57 times more volatile than BOS Better Online. It trades about 0.05 of its total potential returns per unit of risk. BOS Better Online is currently generating about 0.13 per unit of volatility. If you would invest  295.00  in BOS Better Online on September 26, 2024 and sell it today you would earn a total of  33.00  from holding BOS Better Online or generate 11.19% return on investment over 90 days.

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

Kimball Electronics  vs.  BOS Better Online

Kimball Electronics

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kimball Electronics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Kimball Electronics may actually be approaching a critical reversion point that can send shares even higher in January 2025.

BOS Better Online

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BOS Better Online are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, BOS Better may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Kimball Electronics and BOS Better

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

The idea behind Kimball Electronics and BOS Better Online 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.