Correlation Between BCE and KVH Industries
Can any of the company-specific risk be diversified away by investing in both BCE 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 BCE and KVH Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCE Inc and KVH Industries, you can compare the effects of market volatilities on BCE 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 BCE with a short position of KVH Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCE and KVH Industries.
Diversification Opportunities for BCE and KVH Industries
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BCE and KVH is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding BCE Inc and KVH Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KVH Industries and BCE 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 BCE Inc 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 BCE i.e., BCE and KVH Industries go up and down completely randomly.
Pair Corralation between BCE and KVH Industries
Considering the 90-day investment horizon BCE Inc is expected to generate 0.4 times more return on investment than KVH Industries. However, BCE Inc is 2.49 times less risky than KVH Industries. It trades about -0.07 of its potential returns per unit of risk. KVH Industries is currently generating about -0.03 per unit of risk. If you would invest 4,036 in BCE Inc on August 27, 2024 and sell it today you would lose (1,359) from holding BCE Inc or give up 33.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BCE Inc vs. KVH Industries
Performance |
| Timeline |
| BCE Inc |
| KVH Industries |
BCE and KVH Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCE and KVH Industries
The main advantage of trading using opposite BCE and KVH Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCE 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.| BCE vs. Liberty Broadband Srs | BCE vs. Ribbon Communications | BCE vs. Liberty Broadband Srs | BCE vs. Shenandoah Telecommunications Co |
| 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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