Correlation Between Tritium DCFC and Kimball Electronics

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

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

Diversification Opportunities for Tritium DCFC and Kimball Electronics

-0.37

Correlation Coefficient

Tritium DCFC  Kimball Electronics

Very good diversification

The 3 months correlation between Tritium and Kimball is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Tritium DCFC Limited and Kimball Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimball Electronics and Tritium DCFC 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 Tritium DCFC Limited 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 Tritium DCFC i.e., Tritium DCFC and Kimball Electronics go up and down completely randomly.

Pair Corralation between Tritium DCFC and Kimball Electronics

If you would invest  1,778  in Kimball Electronics on September 2, 2024 and sell it today you would earn a total of  183.00  from holding Kimball Electronics or generate 10.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	3.13%
Values	Daily Returns

Tritium DCFC Limited  vs.  Kimball Electronics

Tritium DCFC Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tritium DCFC Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Tritium DCFC is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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 abnormal 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 Tritium DCFC and Kimball Electronics

The main advantage of trading using opposite Tritium DCFC and Kimball Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tritium DCFC 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 Tritium DCFC Limited 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.