Correlation Between Kimball Electronics and Cisco Systems
Can any of the company-specific risk be diversified away by investing in both Kimball Electronics and Cisco Systems 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 Cisco Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kimball Electronics and Cisco Systems, you can compare the effects of market volatilities on Kimball Electronics and Cisco Systems 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 Cisco Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kimball Electronics and Cisco Systems.
Diversification Opportunities for Kimball Electronics and Cisco Systems
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kimball and Cisco is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Kimball Electronics and Cisco Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cisco Systems 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 Cisco Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cisco Systems has no effect on the direction of Kimball Electronics i.e., Kimball Electronics and Cisco Systems go up and down completely randomly.
Pair Corralation between Kimball Electronics and Cisco Systems
Allowing for the 90-day total investment horizon Kimball Electronics is expected to generate 2.29 times more return on investment than Cisco Systems. However, Kimball Electronics is 2.29 times more volatile than Cisco Systems. It trades about 0.26 of its potential returns per unit of risk. Cisco Systems is currently generating about 0.12 per unit of risk. If you would invest 1,858 in Kimball Electronics on May 29, 2025 and sell it today you would earn a total of 1,013 from holding Kimball Electronics or generate 54.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kimball Electronics vs. Cisco Systems
Performance |
| Timeline |
| Kimball Electronics |
| Cisco Systems |
Kimball Electronics and Cisco Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kimball Electronics and Cisco Systems
The main advantage of trading using opposite Kimball Electronics and Cisco Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kimball Electronics position performs unexpectedly, Cisco Systems 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 Cisco Systems will offset losses from the drop in Cisco Systems' long position.| Kimball Electronics vs. Energizer Holdings | Kimball Electronics vs. Acuity Brands | Kimball Electronics vs. Espey Mfg Electronics | Kimball Electronics vs. Preformed Line Products |
| Cisco Systems vs. BeWhere Holdings | Cisco Systems vs. Collplant Biotechnologies | Cisco Systems vs. Crexendo | Cisco Systems vs. Electronic Systems Technology |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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