Correlation Between Intevac and Kadant

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

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

Diversification Opportunities for Intevac and Kadant

0.07

Correlation Coefficient

Intevac  Kadant

Significant diversification

The 3 months correlation between Intevac and Kadant is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Intevac and Kadant Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kadant Inc and Intevac 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 Intevac are associated (or correlated) with Kadant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kadant Inc has no effect on the direction of Intevac i.e., Intevac and Kadant go up and down completely randomly.

Pair Corralation between Intevac and Kadant

Given the investment horizon of 90 days Intevac is expected to generate 1.33 times more return on investment than Kadant. However, Intevac is 1.33 times more volatile than Kadant Inc. It trades about 0.12 of its potential returns per unit of risk. Kadant Inc is currently generating about 0.02 per unit of risk. If you would invest  335.00  in Intevac on December 28, 2024 and sell it today you would earn a total of  65.00  from holding Intevac or generate 19.4% return on investment over 90 days.

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

Intevac  vs.  Kadant Inc

Intevac

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intevac are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Intevac exhibited solid returns over the last few months and may actually be approaching a breakup point.

Kadant Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kadant Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Kadant is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Intevac and Kadant

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

The idea behind Intevac and Kadant Inc 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.