Correlation Between Kimball Electronics and Ideal Power

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

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

Diversification Opportunities for Kimball Electronics and Ideal Power

0.71

Correlation Coefficient

Kimball Electronics  Ideal Power

Poor diversification

The 3 months correlation between Kimball and Ideal is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Kimball Electronics and Ideal Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ideal Power 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 Ideal Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ideal Power has no effect on the direction of Kimball Electronics i.e., Kimball Electronics and Ideal Power go up and down completely randomly.

Pair Corralation between Kimball Electronics and Ideal Power

Allowing for the 90-day total investment horizon Kimball Electronics is expected to generate 0.51 times more return on investment than Ideal Power. However, Kimball Electronics is 1.95 times less risky than Ideal Power. It trades about -0.07 of its potential returns per unit of risk. Ideal Power is currently generating about -0.16 per unit of risk. If you would invest  1,858  in Kimball Electronics on December 28, 2024 and sell it today you would lose (172.00) from holding Kimball Electronics or give up 9.26% of portfolio value over 90 days.

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

Kimball Electronics  vs.  Ideal Power

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 unfluctuating 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.

Ideal Power

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ideal Power has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Kimball Electronics and Ideal Power

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

The idea behind Kimball Electronics and Ideal Power 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.