Correlation Between Kimball Electronics and VerifyMe
Can any of the company-specific risk be diversified away by investing in both Kimball Electronics and VerifyMe 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 VerifyMe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kimball Electronics and VerifyMe, you can compare the effects of market volatilities on Kimball Electronics and VerifyMe 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 VerifyMe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimball Electronics and VerifyMe.
Diversification Opportunities for Kimball Electronics and VerifyMe
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kimball and VerifyMe is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Kimball Electronics and VerifyMe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VerifyMe 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 VerifyMe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VerifyMe has no effect on the direction of Kimball Electronics i.e., Kimball Electronics and VerifyMe go up and down completely randomly.
Pair Corralation between Kimball Electronics and VerifyMe
Allowing for the 90-day total investment horizon Kimball Electronics is expected to under-perform the VerifyMe. But the stock apears to be less risky and, when comparing its historical volatility, Kimball Electronics is 2.3 times less risky than VerifyMe. The stock trades about 0.0 of its potential returns per unit of risk. The VerifyMe is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 111.00 in VerifyMe on September 6, 2024 and sell it today you would lose (51.00) from holding VerifyMe or give up 45.95% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Kimball Electronics vs. VerifyMe
Performance |
Timeline |
Kimball Electronics |
VerifyMe |
Kimball Electronics and VerifyMe Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kimball Electronics and VerifyMe
The main advantage of trading using opposite Kimball Electronics and VerifyMe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimball Electronics position performs unexpectedly, VerifyMe 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 VerifyMe will offset losses from the drop in VerifyMe's long position.Kimball Electronics vs. Knowles Cor | Kimball Electronics vs. Ubiquiti Networks | Kimball Electronics vs. Viavi Solutions | Kimball Electronics vs. Vislink Technologies |
VerifyMe vs. Knowles Cor | VerifyMe vs. Ubiquiti Networks | VerifyMe vs. Viavi Solutions | VerifyMe vs. Vislink Technologies |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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