Correlation Between KIMBALL ELECTRONICS and ALERION CLEANPOWER

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

By analyzing existing cross correlation between KIMBALL ELECTRONICS and ALERION CLEANPOWER, you can compare the effects of market volatilities on KIMBALL ELECTRONICS and ALERION CLEANPOWER 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 ALERION CLEANPOWER. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMBALL ELECTRONICS and ALERION CLEANPOWER.

Diversification Opportunities for KIMBALL ELECTRONICS and ALERION CLEANPOWER

0.56

Correlation Coefficient

KIMBALL ELECTRONICS  ALERION CLEANPOWER

Very weak diversification

The 3 months correlation between KIMBALL and ALERION is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS and ALERION CLEANPOWER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALERION CLEANPOWER 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 ALERION CLEANPOWER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALERION CLEANPOWER has no effect on the direction of KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and ALERION CLEANPOWER go up and down completely randomly.

Pair Corralation between KIMBALL ELECTRONICS and ALERION CLEANPOWER

Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to generate 1.12 times less return on investment than ALERION CLEANPOWER. In addition to that, KIMBALL ELECTRONICS is 1.0 times more volatile than ALERION CLEANPOWER. It trades about 0.18 of its total potential returns per unit of risk. ALERION CLEANPOWER is currently generating about 0.2 per unit of volatility. If you would invest  1,414  in ALERION CLEANPOWER on April 20, 2025 and sell it today you would earn a total of  751.00  from holding ALERION CLEANPOWER or generate 53.11% return on investment over 90 days.

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

KIMBALL ELECTRONICS  vs.  ALERION CLEANPOWER

KIMBALL ELECTRONICS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KIMBALL ELECTRONICS are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, KIMBALL ELECTRONICS reported solid returns over the last few months and may actually be approaching a breakup point.

ALERION CLEANPOWER

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ALERION CLEANPOWER are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, ALERION CLEANPOWER reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KIMBALL ELECTRONICS and ALERION CLEANPOWER

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

The idea behind KIMBALL ELECTRONICS and ALERION CLEANPOWER 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 Channel module to use Commodity Channel Index to analyze current equity momentum.