Correlation Between KVH Industries and DZS

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

By analyzing existing cross correlation between KVH Industries and DZS Inc, you can compare the effects of market volatilities on KVH Industries and DZS 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 DZS. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and DZS.

Diversification Opportunities for KVH Industries and DZS

-0.77

Correlation Coefficient

KVH Industries  DZS

Pay attention - limited upside

The 3 months correlation between KVH and DZS is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and DZS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DZS Inc 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 DZS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DZS Inc has no effect on the direction of KVH Industries i.e., KVH Industries and DZS go up and down completely randomly.

Pair Corralation between KVH Industries and DZS

Given the investment horizon of 90 days KVH Industries is expected to generate 0.39 times more return on investment than DZS. However, KVH Industries is 2.55 times less risky than DZS. It trades about -0.03 of its potential returns per unit of risk. DZS Inc is currently generating about -0.1 per unit of risk. If you would invest  996.00  in KVH Industries on September 3, 2024 and sell it today you would lose (445.00) from holding KVH Industries or give up 44.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	84.65%
Values	Daily Returns

KVH Industries  vs.  DZS Inc

KVH Industries

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KVH Industries are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain technical indicators, KVH Industries demonstrated solid returns over the last few months and may actually be approaching a breakup point.

DZS Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DZS Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, DZS is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with KVH Industries and DZS

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

The idea behind KVH Industries and DZS 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.