Correlation Between Quantum Computing and Kimball Electronics

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

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

Diversification Opportunities for Quantum Computing and Kimball Electronics

0.18

Correlation Coefficient

Quantum Computing  Kimball Electronics

Average diversification

The 3 months correlation between Quantum and Kimball is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Quantum Computing and Kimball Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimball Electronics and Quantum Computing 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 Quantum Computing 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 Quantum Computing i.e., Quantum Computing and Kimball Electronics go up and down completely randomly.

Pair Corralation between Quantum Computing and Kimball Electronics

Given the investment horizon of 90 days Quantum Computing is expected to generate 5.34 times more return on investment than Kimball Electronics. However, Quantum Computing is 5.34 times more volatile than Kimball Electronics. It trades about 0.14 of its potential returns per unit of risk. Kimball Electronics is currently generating about -0.04 per unit of risk. If you would invest  91.00  in Quantum Computing on September 23, 2024 and sell it today you would earn a total of  1,671  from holding Quantum Computing or generate 1836.26% return on investment over 90 days.

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

Quantum Computing  vs.  Kimball Electronics

Quantum Computing

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Quantum Computing are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental drivers, Quantum Computing unveiled solid returns over the last few months and may actually be approaching a breakup point.

Kimball Electronics

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kimball Electronics are ranked lower than 2 (%) 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 recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Quantum Computing and Kimball Electronics

The main advantage of trading using opposite Quantum Computing and Kimball Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quantum Computing 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' long position.

The idea behind Quantum Computing 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.