Correlation Between OSRAM LICHT and KIMBALL ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both OSRAM LICHT 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 OSRAM LICHT and KIMBALL ELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OSRAM LICHT N and KIMBALL ELECTRONICS, you can compare the effects of market volatilities on OSRAM LICHT 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 OSRAM LICHT with a short position of KIMBALL ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of OSRAM LICHT and KIMBALL ELECTRONICS.
Diversification Opportunities for OSRAM LICHT and KIMBALL ELECTRONICS
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between OSRAM and KIMBALL is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding OSRAM LICHT N and KIMBALL ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIMBALL ELECTRONICS and OSRAM LICHT 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 OSRAM LICHT N 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 OSRAM LICHT i.e., OSRAM LICHT and KIMBALL ELECTRONICS go up and down completely randomly.
Pair Corralation between OSRAM LICHT and KIMBALL ELECTRONICS
Assuming the 90 days trading horizon OSRAM LICHT is expected to generate 13.16 times less return on investment than KIMBALL ELECTRONICS. But when comparing it to its historical volatility, OSRAM LICHT N is 12.86 times less risky than KIMBALL ELECTRONICS. It trades about 0.13 of its potential returns per unit of risk. KIMBALL ELECTRONICS is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,270 in KIMBALL ELECTRONICS on April 10, 2025 and sell it today you would earn a total of 420.00 from holding KIMBALL ELECTRONICS or generate 33.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
OSRAM LICHT N vs. KIMBALL ELECTRONICS
Performance |
Timeline |
OSRAM LICHT N |
KIMBALL ELECTRONICS |
OSRAM LICHT and KIMBALL ELECTRONICS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with OSRAM LICHT and KIMBALL ELECTRONICS
The main advantage of trading using opposite OSRAM LICHT and KIMBALL ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OSRAM LICHT 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.OSRAM LICHT vs. KENEDIX OFFICE INV | OSRAM LICHT vs. Pets at Home | OSRAM LICHT vs. BACKBONE Technology AG | OSRAM LICHT vs. Wayside Technology Group |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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