Correlation Between AudioCodes and KVH Industries
Can any of the company-specific risk be diversified away by investing in both AudioCodes 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 AudioCodes and KVH Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AudioCodes and KVH Industries, you can compare the effects of market volatilities on AudioCodes 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 AudioCodes with a short position of KVH Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of AudioCodes and KVH Industries.
Diversification Opportunities for AudioCodes and KVH Industries
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AudioCodes and KVH is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding AudioCodes and KVH Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KVH Industries and AudioCodes 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 AudioCodes 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 AudioCodes i.e., AudioCodes and KVH Industries go up and down completely randomly.
Pair Corralation between AudioCodes and KVH Industries
Given the investment horizon of 90 days AudioCodes is expected to generate 1.03 times more return on investment than KVH Industries. However, AudioCodes is 1.03 times more volatile than KVH Industries. It trades about 0.02 of its potential returns per unit of risk. KVH Industries is currently generating about -0.03 per unit of risk. If you would invest 867.00 in AudioCodes on August 28, 2024 and sell it today you would earn a total of 63.00 from holding AudioCodes or generate 7.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AudioCodes vs. KVH Industries
Performance |
| Timeline |
| AudioCodes |
| KVH Industries |
AudioCodes and KVH Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AudioCodes and KVH Industries
The main advantage of trading using opposite AudioCodes and KVH Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AudioCodes 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.| AudioCodes vs. Ichor Holdings | AudioCodes vs. Fabrinet | AudioCodes vs. Hello Group | AudioCodes vs. Ultra Clean Holdings |
| KVH Industries vs. Ichor Holdings | KVH Industries vs. Fabrinet | KVH Industries vs. Hello Group | KVH Industries vs. Ultra Clean Holdings |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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