Correlation Between Kimball Electronics and Lighting Science

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

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

Diversification Opportunities for Kimball Electronics and Lighting Science

-0.67

Correlation Coefficient

Kimball Electronics  Lighting Science

Excellent diversification

The 3 months correlation between Kimball and Lighting is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Kimball Electronics and Lighting Science Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lighting Science 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 Lighting Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lighting Science has no effect on the direction of Kimball Electronics i.e., Kimball Electronics and Lighting Science go up and down completely randomly.

Pair Corralation between Kimball Electronics and Lighting Science

If you would invest  1,778  in Kimball Electronics on August 31, 2024 and sell it today you would earn a total of  163.00  from holding Kimball Electronics or generate 9.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	0.0%
Values	Daily Returns

Kimball Electronics  vs.  Lighting Science Group

Kimball Electronics

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kimball Electronics are ranked lower than 5 (%) 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 December 2024.

Lighting Science

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lighting Science Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Lighting Science is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Kimball Electronics and Lighting Science

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

The idea behind Kimball Electronics and Lighting Science Group 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 Global Correlations module to find global opportunities by holding instruments from different markets.