Correlation Between Sabre Corpo and KVH Industries

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

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

Diversification Opportunities for Sabre Corpo and KVH Industries

-0.25

Correlation Coefficient

Sabre Corpo  KVH Industries

Very good diversification

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

Pair Corralation between Sabre Corpo and KVH Industries

Given the investment horizon of 90 days Sabre Corpo is expected to generate 2.93 times more return on investment than KVH Industries. However, Sabre Corpo is 2.93 times more volatile than KVH Industries. It trades about 0.1 of its potential returns per unit of risk. KVH Industries is currently generating about 0.07 per unit of risk. If you would invest  357.00  in Sabre Corpo on December 2, 2024 and sell it today you would earn a total of  56.00  from holding Sabre Corpo or generate 15.69% return on investment over 90 days.

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

Sabre Corpo  vs.  KVH Industries

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.

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.

Pair Trading with Sabre Corpo and KVH Industries

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

The idea behind Sabre Corpo and KVH Industries 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.