Correlation Between QURATE RETAIL and KIMBALL ELECTRONICS

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

By analyzing existing cross correlation between QURATE RETAIL INC and KIMBALL ELECTRONICS, you can compare the effects of market volatilities on QURATE RETAIL and KIMBALL ELECTRONICS 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 QURATE RETAIL with a short position of KIMBALL ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of QURATE RETAIL and KIMBALL ELECTRONICS.

Diversification Opportunities for QURATE RETAIL and KIMBALL ELECTRONICS

-0.55

Correlation Coefficient

QURATE RETAIL  KIMBALL ELECTRONICS

Excellent diversification

The 3 months correlation between QURATE and KIMBALL is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding QURATE RETAIL INC and KIMBALL ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIMBALL ELECTRONICS and QURATE RETAIL 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 QURATE RETAIL INC are associated (or correlated) with KIMBALL ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIMBALL ELECTRONICS has no effect on the direction of QURATE RETAIL i.e., QURATE RETAIL and KIMBALL ELECTRONICS go up and down completely randomly.

Pair Corralation between QURATE RETAIL and KIMBALL ELECTRONICS

Assuming the 90 days trading horizon QURATE RETAIL INC is expected to generate 14.93 times more return on investment than KIMBALL ELECTRONICS. However, QURATE RETAIL is 14.93 times more volatile than KIMBALL ELECTRONICS. It trades about 0.11 of its potential returns per unit of risk. KIMBALL ELECTRONICS is currently generating about -0.1 per unit of risk. If you would invest  290.00  in QURATE RETAIL INC on December 30, 2024 and sell it today you would earn a total of  310.00  from holding QURATE RETAIL INC or generate 106.9% return on investment over 90 days.

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

QURATE RETAIL INC  vs.  KIMBALL ELECTRONICS

QURATE RETAIL INC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in QURATE RETAIL INC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, QURATE RETAIL reported solid returns over the last few months and may actually be approaching a breakup point.

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. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with QURATE RETAIL and KIMBALL ELECTRONICS

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

The idea behind QURATE RETAIL INC and KIMBALL ELECTRONICS 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.