Correlation Between KIMBALL ELECTRONICS and SUN ART

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Can any of the company-specific risk be diversified away by investing in both KIMBALL ELECTRONICS and SUN ART 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 SUN ART into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KIMBALL ELECTRONICS and SUN ART RETAIL, you can compare the effects of market volatilities on KIMBALL ELECTRONICS and SUN ART 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 SUN ART. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMBALL ELECTRONICS and SUN ART.

Diversification Opportunities for KIMBALL ELECTRONICS and SUN ART

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between KIMBALL and SUN is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS and SUN ART RETAIL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUN ART RETAIL 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 SUN ART. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUN ART RETAIL has no effect on the direction of KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and SUN ART go up and down completely randomly.

Pair Corralation between KIMBALL ELECTRONICS and SUN ART

Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to generate 1.71 times less return on investment than SUN ART. In addition to that, KIMBALL ELECTRONICS is 1.21 times more volatile than SUN ART RETAIL. It trades about 0.04 of its total potential returns per unit of risk. SUN ART RETAIL is currently generating about 0.08 per unit of volatility. If you would invest  21.00  in SUN ART RETAIL on April 20, 2025 and sell it today you would earn a total of  4.00  from holding SUN ART RETAIL or generate 19.05% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

KIMBALL ELECTRONICS  vs.  SUN ART RETAIL

 Performance 
       Timeline  
KIMBALL ELECTRONICS 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
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.
SUN ART RETAIL 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in SUN ART RETAIL are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, SUN ART exhibited solid returns over the last few months and may actually be approaching a breakup point.

KIMBALL ELECTRONICS and SUN ART Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with KIMBALL ELECTRONICS and SUN ART

The main advantage of trading using opposite KIMBALL ELECTRONICS and SUN ART positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIMBALL ELECTRONICS position performs unexpectedly, SUN ART 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 SUN ART will offset losses from the drop in SUN ART's long position.
The idea behind KIMBALL ELECTRONICS and SUN ART RETAIL 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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