Correlation Between Kimball Electronics and ViaSat

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

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

Diversification Opportunities for Kimball Electronics and ViaSat

-0.52

Correlation Coefficient

Kimball Electronics  ViaSat

Excellent diversification

The 3 months correlation between Kimball and ViaSat is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Kimball Electronics and ViaSat Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ViaSat Inc 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 ViaSat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ViaSat Inc has no effect on the direction of Kimball Electronics i.e., Kimball Electronics and ViaSat go up and down completely randomly.

Pair Corralation between Kimball Electronics and ViaSat

Allowing for the 90-day total investment horizon Kimball Electronics is expected to generate 0.41 times more return on investment than ViaSat. However, Kimball Electronics is 2.41 times less risky than ViaSat. It trades about 0.02 of its potential returns per unit of risk. ViaSat Inc is currently generating about -0.06 per unit of risk. If you would invest  1,851  in Kimball Electronics on September 30, 2024 and sell it today you would earn a total of  31.00  from holding Kimball Electronics or generate 1.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Kimball Electronics  vs.  ViaSat Inc

Kimball Electronics

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kimball Electronics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Kimball Electronics is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

ViaSat Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ViaSat Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Kimball Electronics and ViaSat

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

The idea behind Kimball Electronics and ViaSat Inc 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.