Correlation Between KVH Industries and Integrated Media

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

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

Diversification Opportunities for KVH Industries and Integrated Media

0.11

Correlation Coefficient

KVH Industries  Integrated Media

Average diversification

The 3 months correlation between KVH and Integrated is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and Integrated Media Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Media Tec 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 Integrated Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Media Tec has no effect on the direction of KVH Industries i.e., KVH Industries and Integrated Media go up and down completely randomly.

Pair Corralation between KVH Industries and Integrated Media

Given the investment horizon of 90 days KVH Industries is expected to generate 1518.32 times less return on investment than Integrated Media. But when comparing it to its historical volatility, KVH Industries is 14.9 times less risky than Integrated Media. It trades about 0.0 of its potential returns per unit of risk. Integrated Media Technology is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  120.00  in Integrated Media Technology on December 30, 2024 and sell it today you would earn a total of  52.00  from holding Integrated Media Technology or generate 43.33% return on investment over 90 days.

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

KVH Industries  vs.  Integrated Media Technology

KVH Industries

Risk-Adjusted Performance

Very Weak

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

Integrated Media Tec

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Integrated Media Technology are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Integrated Media exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KVH Industries and Integrated Media

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

The idea behind KVH Industries and Integrated Media Technology 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.