Correlation Between Kimball Electronics and Eshallgo

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

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

Diversification Opportunities for Kimball Electronics and Eshallgo

0.78

Correlation Coefficient

Kimball Electronics  Eshallgo

Poor diversification

The 3 months correlation between Kimball and Eshallgo is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Kimball Electronics and Eshallgo Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eshallgo Class A 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 Eshallgo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eshallgo Class A has no effect on the direction of Kimball Electronics i.e., Kimball Electronics and Eshallgo go up and down completely randomly.

Pair Corralation between Kimball Electronics and Eshallgo

Allowing for the 90-day total investment horizon Kimball Electronics is expected to generate 11.64 times less return on investment than Eshallgo. But when comparing it to its historical volatility, Kimball Electronics is 3.32 times less risky than Eshallgo. It trades about 0.05 of its potential returns per unit of risk. Eshallgo Class A is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  217.00  in Eshallgo Class A on September 13, 2024 and sell it today you would earn a total of  199.00  from holding Eshallgo Class A or generate 91.71% return on investment over 90 days.

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

Kimball Electronics  vs.  Eshallgo Class A

Kimball Electronics

Risk-Adjusted Performance

4 of 100

Modest

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. In spite of rather abnormal technical and fundamental indicators, Kimball Electronics may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Eshallgo Class A

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eshallgo Class A are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Eshallgo displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kimball Electronics and Eshallgo

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

The idea behind Kimball Electronics and Eshallgo Class A 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.

Check out your portfolio center.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.