Correlation Between KVH Industries and Baldwin Insurance
Can any of the company-specific risk be diversified away by investing in both KVH Industries and Baldwin Insurance 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 KVH Industries and Baldwin Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and The Baldwin Insurance, you can compare the effects of market volatilities on KVH Industries and Baldwin Insurance 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 KVH Industries with a short position of Baldwin Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and Baldwin Insurance.
Diversification Opportunities for KVH Industries and Baldwin Insurance
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between KVH and Baldwin is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and The Baldwin Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baldwin Insurance and KVH Industries 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 KVH Industries are associated (or correlated) with Baldwin Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baldwin Insurance has no effect on the direction of KVH Industries i.e., KVH Industries and Baldwin Insurance go up and down completely randomly.
Pair Corralation between KVH Industries and Baldwin Insurance
Given the investment horizon of 90 days KVH Industries is expected to generate 0.77 times more return on investment than Baldwin Insurance. However, KVH Industries is 1.3 times less risky than Baldwin Insurance. It trades about 0.02 of its potential returns per unit of risk. The Baldwin Insurance is currently generating about -0.12 per unit of risk. If you would invest 575.00 in KVH Industries on December 2, 2024 and sell it today you would earn a total of 8.00 from holding KVH Industries or generate 1.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
KVH Industries vs. The Baldwin Insurance
Performance |
Timeline |
KVH Industries |
Baldwin Insurance |
KVH Industries and Baldwin Insurance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KVH Industries and Baldwin Insurance
The main advantage of trading using opposite KVH Industries and Baldwin Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, Baldwin Insurance 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 Baldwin Insurance will offset losses from the drop in Baldwin Insurance's long position.KVH Industries vs. Telesat Corp | KVH Industries vs. Comtech Telecommunications Corp | KVH Industries vs. Knowles Cor | KVH Industries vs. Ituran Location and |
Baldwin Insurance vs. Zhihu Inc ADR | Baldwin Insurance vs. Skillful Craftsman Education | Baldwin Insurance vs. Weibo Corp | Baldwin Insurance vs. Universal Technical Institute |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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