Correlation Between Arrow Financial and KVH Industries
Can any of the company-specific risk be diversified away by investing in both Arrow Financial 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 Arrow Financial and KVH Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Financial and KVH Industries, you can compare the effects of market volatilities on Arrow Financial 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 Arrow Financial with a short position of KVH Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Financial and KVH Industries.
Diversification Opportunities for Arrow Financial and KVH Industries
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arrow and KVH is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Financial and KVH Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KVH Industries and Arrow Financial 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 Arrow Financial 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 Arrow Financial i.e., Arrow Financial and KVH Industries go up and down completely randomly.
Pair Corralation between Arrow Financial and KVH Industries
Given the investment horizon of 90 days Arrow Financial is expected to generate 1.26 times less return on investment than KVH Industries. In addition to that, Arrow Financial is 1.73 times more volatile than KVH Industries. It trades about 0.2 of its total potential returns per unit of risk. KVH Industries is currently generating about 0.44 per unit of volatility. If you would invest 460.00 in KVH Industries on September 2, 2024 and sell it today you would earn a total of 91.00 from holding KVH Industries or generate 19.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Financial vs. KVH Industries
Performance |
| Timeline |
| Arrow Financial |
| KVH Industries |
Arrow Financial and KVH Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Financial and KVH Industries
The main advantage of trading using opposite Arrow Financial and KVH Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Financial 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.| Arrow Financial vs. Affinity Bancshares | Arrow Financial vs. Auburn National Bancorporation | Arrow Financial vs. BayCom Corp | Arrow Financial vs. Community West Bancshares |
| KVH Industries vs. Telesat Corp | KVH Industries vs. Comtech Telecommunications Corp | KVH Industries vs. Knowles Cor | KVH Industries vs. Ituran Location and |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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