Correlation Between KIMBALL ELECTRONICS and WILLIS LEASE

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

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

Diversification Opportunities for KIMBALL ELECTRONICS and WILLIS LEASE

-0.34

Correlation Coefficient

KIMBALL ELECTRONICS  WILLIS LEASE

Very good diversification

The 3 months correlation between KIMBALL and WILLIS is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS and WILLIS LEASE FIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WILLIS LEASE FIN 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 WILLIS LEASE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WILLIS LEASE FIN has no effect on the direction of KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and WILLIS LEASE go up and down completely randomly.

Pair Corralation between KIMBALL ELECTRONICS and WILLIS LEASE

Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to generate 1.23 times more return on investment than WILLIS LEASE. However, KIMBALL ELECTRONICS is 1.23 times more volatile than WILLIS LEASE FIN. It trades about 0.15 of its potential returns per unit of risk. WILLIS LEASE FIN is currently generating about 0.0 per unit of risk. If you would invest  1,200  in KIMBALL ELECTRONICS on April 24, 2025 and sell it today you would earn a total of  450.00  from holding KIMBALL ELECTRONICS or generate 37.5% return on investment over 90 days.

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

KIMBALL ELECTRONICS  vs.  WILLIS LEASE FIN

KIMBALL ELECTRONICS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KIMBALL ELECTRONICS are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, KIMBALL ELECTRONICS reported solid returns over the last few months and may actually be approaching a breakup point.

WILLIS LEASE FIN

Risk-Adjusted Performance

Very Weak

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

Pair Trading with KIMBALL ELECTRONICS and WILLIS LEASE

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

The idea behind KIMBALL ELECTRONICS and WILLIS LEASE FIN 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.