Correlation Between VerifyMe and Kimball Electronics

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

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

Diversification Opportunities for VerifyMe and Kimball Electronics

-0.62

Correlation Coefficient

VerifyMe  Kimball Electronics

Excellent diversification

The 3 months correlation between VerifyMe and Kimball is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding VerifyMe and Kimball Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimball Electronics and VerifyMe 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 VerifyMe 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 VerifyMe i.e., VerifyMe and Kimball Electronics go up and down completely randomly.

Pair Corralation between VerifyMe and Kimball Electronics

Given the investment horizon of 90 days VerifyMe is expected to under-perform the Kimball Electronics. In addition to that, VerifyMe is 2.86 times more volatile than Kimball Electronics. It trades about -0.16 of its total potential returns per unit of risk. Kimball Electronics is currently generating about 0.09 per unit of volatility. If you would invest  1,754  in Kimball Electronics on September 6, 2024 and sell it today you would earn a total of  203.00  from holding Kimball Electronics or generate 11.57% return on investment over 90 days.

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

VerifyMe  vs.  Kimball Electronics

VerifyMe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VerifyMe 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 primary indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Kimball Electronics

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kimball Electronics are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Kimball Electronics may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with VerifyMe and Kimball Electronics

The main advantage of trading using opposite VerifyMe and Kimball Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VerifyMe 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 VerifyMe 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 Commodity Directory module to find actively traded commodities issued by global exchanges.