Correlation Between KVH Industries and Network CN
Can any of the company-specific risk be diversified away by investing in both KVH Industries and Network CN 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 Network CN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and Network CN, you can compare the effects of market volatilities on KVH Industries and Network CN 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 Network CN. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and Network CN.
Diversification Opportunities for KVH Industries and Network CN
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KVH and Network is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and Network CN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Network CN 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 Network CN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Network CN has no effect on the direction of KVH Industries i.e., KVH Industries and Network CN go up and down completely randomly.
Pair Corralation between KVH Industries and Network CN
Given the investment horizon of 90 days KVH Industries is expected to under-perform the Network CN. But the stock apears to be less risky and, when comparing its historical volatility, KVH Industries is 21.77 times less risky than Network CN. The stock trades about -0.02 of its potential returns per unit of risk. The Network CN is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 8.00 in Network CN on December 27, 2024 and sell it today you would earn a total of 22.00 from holding Network CN or generate 275.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 96.77% |
Values | Daily Returns |
KVH Industries vs. Network CN
Performance |
Timeline |
KVH Industries |
Network CN |
KVH Industries and Network CN Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KVH Industries and Network CN
The main advantage of trading using opposite KVH Industries and Network CN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, Network CN 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 Network CN will offset losses from the drop in Network CN'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 |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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