Correlation Between KVH Industries and Sabre Corpo

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

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

Diversification Opportunities for KVH Industries and Sabre Corpo

-0.25

Correlation Coefficient

KVH Industries  Sabre Corpo

Very good diversification

The 3 months correlation between KVH and Sabre is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and Sabre Corpo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabre Corpo 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 Sabre Corpo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabre Corpo has no effect on the direction of KVH Industries i.e., KVH Industries and Sabre Corpo go up and down completely randomly.

Pair Corralation between KVH Industries and Sabre Corpo

Given the investment horizon of 90 days KVH Industries is expected to generate 4.07 times less return on investment than Sabre Corpo. But when comparing it to its historical volatility, KVH Industries is 2.34 times less risky than Sabre Corpo. It trades about 0.02 of its potential returns per unit of risk. Sabre Corpo is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  394.00  in Sabre Corpo on December 2, 2024 and sell it today you would earn a total of  19.00  from holding Sabre Corpo or generate 4.82% 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.  Sabre Corpo

KVH Industries

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KVH Industries are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Sabre Corpo

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sabre Corpo are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental drivers, Sabre Corpo may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with KVH Industries and Sabre Corpo

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

The idea behind KVH Industries and Sabre Corpo 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.