Correlation Between ENELIM and KVH Industries

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

By analyzing existing cross correlation between ENELIM 6 07 OCT 39 and KVH Industries, you can compare the effects of market volatilities on ENELIM 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 ENELIM with a short position of KVH Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENELIM and KVH Industries.

Diversification Opportunities for ENELIM and KVH Industries

-0.22

Correlation Coefficient

ENELIM  KVH Industries

Very good diversification

The 3 months correlation between ENELIM and KVH is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding ENELIM 6 07 OCT 39 and KVH Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KVH Industries and ENELIM 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 ENELIM 6 07 OCT 39 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 ENELIM i.e., ENELIM and KVH Industries go up and down completely randomly.

Pair Corralation between ENELIM and KVH Industries

Assuming the 90 days trading horizon ENELIM 6 07 OCT 39 is expected to under-perform the KVH Industries. But the bond apears to be less risky and, when comparing its historical volatility, ENELIM 6 07 OCT 39 is 1.67 times less risky than KVH Industries. The bond trades about -0.25 of its potential returns per unit of risk. The KVH Industries is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  471.00  in KVH Industries on September 4, 2024 and sell it today you would earn a total of  113.00  from holding KVH Industries or generate 23.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	45.31%
Values	Daily Returns

ENELIM 6 07 OCT 39  vs.  KVH Industries

ENELIM 6 07

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ENELIM 6 07 OCT 39 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for ENELIM 6 07 OCT 39 investors.

KVH Industries

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KVH Industries are ranked lower than 12 (%) 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.

Pair Trading with ENELIM and KVH Industries

The main advantage of trading using opposite ENELIM and KVH Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENELIM 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 ENELIM 6 07 OCT 39 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.