Correlation Between Markforged Holding and Kimball Electronics

Can any of the company-specific risk be diversified away by investing in both Markforged Holding 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 Markforged Holding and Kimball Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Markforged Holding Corp and Kimball Electronics, you can compare the effects of market volatilities on Markforged Holding 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 Markforged Holding with a short position of Kimball Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Markforged Holding and Kimball Electronics.

Diversification Opportunities for Markforged Holding and Kimball Electronics

0.04

Correlation Coefficient

Markforged Holding  Kimball Electronics

Significant diversification

The 3 months correlation between Markforged and Kimball is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Markforged Holding Corp and Kimball Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimball Electronics and Markforged Holding 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 Markforged Holding Corp 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 Markforged Holding i.e., Markforged Holding and Kimball Electronics go up and down completely randomly.

Pair Corralation between Markforged Holding and Kimball Electronics

Given the investment horizon of 90 days Markforged Holding Corp is expected to under-perform the Kimball Electronics. In addition to that, Markforged Holding is 2.63 times more volatile than Kimball Electronics. It trades about -0.02 of its total potential returns per unit of risk. Kimball Electronics is currently generating about 0.03 per unit of volatility. If you would invest  1,693  in Kimball Electronics on February 1, 2024 and sell it today you would earn a total of  400.00  from holding Kimball Electronics or generate 23.63% return on investment over 90 days.

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

Markforged Holding Corp  vs.  Kimball Electronics

Markforged Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Markforged Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Markforged Holding is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Kimball Electronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kimball Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in June 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Markforged Holding and Kimball Electronics

The main advantage of trading using opposite Markforged Holding and Kimball Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Markforged Holding 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' long position.

The idea behind Markforged Holding Corp and Kimball Electronics 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.