Correlation Between MeVis Medical and KIMBALL ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both MeVis Medical 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 MeVis Medical and KIMBALL ELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MeVis Medical Solutions and KIMBALL ELECTRONICS, you can compare the effects of market volatilities on MeVis Medical 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 MeVis Medical with a short position of KIMBALL ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of MeVis Medical and KIMBALL ELECTRONICS.
Diversification Opportunities for MeVis Medical and KIMBALL ELECTRONICS
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MeVis and KIMBALL is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding MeVis Medical Solutions and KIMBALL ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIMBALL ELECTRONICS and MeVis Medical 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 MeVis Medical Solutions 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 MeVis Medical i.e., MeVis Medical and KIMBALL ELECTRONICS go up and down completely randomly.
Pair Corralation between MeVis Medical and KIMBALL ELECTRONICS
Assuming the 90 days trading horizon MeVis Medical Solutions is expected to generate 0.72 times more return on investment than KIMBALL ELECTRONICS. However, MeVis Medical Solutions is 1.39 times less risky than KIMBALL ELECTRONICS. It trades about 0.01 of its potential returns per unit of risk. KIMBALL ELECTRONICS is currently generating about -0.2 per unit of risk. If you would invest 2,400 in MeVis Medical Solutions on September 24, 2024 and sell it today you would earn a total of 0.00 from holding MeVis Medical Solutions or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
MeVis Medical Solutions vs. KIMBALL ELECTRONICS
Performance |
Timeline |
MeVis Medical Solutions |
KIMBALL ELECTRONICS |
MeVis Medical and KIMBALL ELECTRONICS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MeVis Medical and KIMBALL ELECTRONICS
The main advantage of trading using opposite MeVis Medical and KIMBALL ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MeVis Medical 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.MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc | MeVis Medical vs. Apple Inc |
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Check out your portfolio center.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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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