Correlation Between Kimball Electronics and Hollysys Automation

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

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

Diversification Opportunities for Kimball Electronics and Hollysys Automation

0.0

Correlation Coefficient

Kimball Electronics  Hollysys Automation

Pay attention - limited upside

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

Pair Corralation between Kimball Electronics and Hollysys Automation

If you would invest (100.00) in Hollysys Automation Technologies on December 29, 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

Kimball Electronics  vs.  Hollysys Automation Technologi

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 latest abnormal performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

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.

Pair Trading with Kimball Electronics and Hollysys Automation

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

The idea behind Kimball Electronics and Hollysys Automation Technologies 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 Transaction History module to view history of all your transactions and understand their impact on performance.