Correlation Between Belden and KVH Industries
Can any of the company-specific risk be diversified away by investing in both Belden 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 Belden and KVH Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Belden Inc and KVH Industries, you can compare the effects of market volatilities on Belden 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 Belden with a short position of KVH Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Belden and KVH Industries.
Diversification Opportunities for Belden and KVH Industries
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Belden and KVH is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Belden Inc and KVH Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KVH Industries and Belden 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 Belden 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 Belden i.e., Belden and KVH Industries go up and down completely randomly.
Pair Corralation between Belden and KVH Industries
Considering the 90-day investment horizon Belden is expected to generate 4.8 times less return on investment than KVH Industries. But when comparing it to its historical volatility, Belden Inc is 1.48 times less risky than KVH Industries. It trades about 0.11 of its potential returns per unit of risk. KVH Industries is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 528.00 in KVH Industries on October 20, 2024 and sell it today you would earn a total of 65.00 from holding KVH Industries or generate 12.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Belden Inc vs. KVH Industries
Performance |
| Timeline |
| Belden Inc |
| KVH Industries |
Belden and KVH Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Belden and KVH Industries
The main advantage of trading using opposite Belden and KVH Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Belden 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.| Belden vs. Clearfield | Belden vs. Comtech Telecommunications Corp | Belden vs. Knowles Cor | Belden vs. Extreme Networks |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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