Correlation Between Kimball Electronics and Generation Alpha

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

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

Diversification Opportunities for Kimball Electronics and Generation Alpha

-0.1

Correlation Coefficient

Kimball Electronics  Generation Alpha

Good diversification

The 3 months correlation between Kimball and Generation is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Kimball Electronics and Generation Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generation Alpha 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 Generation Alpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generation Alpha has no effect on the direction of Kimball Electronics i.e., Kimball Electronics and Generation Alpha go up and down completely randomly.

Pair Corralation between Kimball Electronics and Generation Alpha

Allowing for the 90-day total investment horizon Kimball Electronics is expected to generate 0.09 times more return on investment than Generation Alpha. However, Kimball Electronics is 11.39 times less risky than Generation Alpha. It trades about 0.2 of its potential returns per unit of risk. Generation Alpha is currently generating about -0.23 per unit of risk. If you would invest  1,818  in Kimball Electronics on October 20, 2024 and sell it today you would earn a total of  99.00  from holding Kimball Electronics or generate 5.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Kimball Electronics  vs.  Generation Alpha

Kimball Electronics

Risk-Adjusted Performance

4 of 100

Insignificant

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 February 2025.

Generation Alpha

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Generation Alpha are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile basic indicators, Generation Alpha disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kimball Electronics and Generation Alpha

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

The idea behind Kimball Electronics and Generation Alpha 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..