Correlation Between KVH Industries and Killbuck Bancshares

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

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

Diversification Opportunities for KVH Industries and Killbuck Bancshares

-0.29

Correlation Coefficient

KVH Industries  Killbuck Bancshares

Very good diversification

The 3 months correlation between KVH and Killbuck is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and Killbuck Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Killbuck Bancshares 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 Killbuck Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Killbuck Bancshares has no effect on the direction of KVH Industries i.e., KVH Industries and Killbuck Bancshares go up and down completely randomly.

Pair Corralation between KVH Industries and Killbuck Bancshares

Given the investment horizon of 90 days KVH Industries is expected to generate 1.11 times more return on investment than Killbuck Bancshares. However, KVH Industries is 1.11 times more volatile than Killbuck Bancshares. It trades about 0.24 of its potential returns per unit of risk. Killbuck Bancshares is currently generating about 0.02 per unit of risk. If you would invest  459.00  in KVH Industries on October 7, 2024 and sell it today you would earn a total of  106.00  from holding KVH Industries or generate 23.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.56%
Values	Daily Returns

KVH Industries  vs.  Killbuck Bancshares

KVH Industries

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KVH Industries are ranked lower than 10 (%) 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.

Killbuck Bancshares

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Killbuck Bancshares are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Killbuck Bancshares is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with KVH Industries and Killbuck Bancshares

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

The idea behind KVH Industries and Killbuck Bancshares 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 Stocks Directory module to find actively traded stocks across global markets.