Correlation Between Casa Systems and KVH Industries
Can any of the company-specific risk be diversified away by investing in both Casa Systems 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 Casa Systems and KVH Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Casa Systems and KVH Industries, you can compare the effects of market volatilities on Casa Systems 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 Casa Systems with a short position of KVH Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Casa Systems and KVH Industries.
Diversification Opportunities for Casa Systems and KVH Industries
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Casa and KVH is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Casa Systems and KVH Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KVH Industries and Casa Systems 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 Casa Systems 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 Casa Systems i.e., Casa Systems and KVH Industries go up and down completely randomly.
Pair Corralation between Casa Systems and KVH Industries
If you would invest 476.00 in KVH Industries on August 24, 2024 and sell it today you would earn a total of 42.00 from holding KVH Industries or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Casa Systems vs. KVH Industries
Performance |
| Timeline |
| Casa Systems |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| KVH Industries |
Casa Systems and KVH Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Casa Systems and KVH Industries
The main advantage of trading using opposite Casa Systems and KVH Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Casa Systems 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.| Casa Systems vs. ADTRAN Inc | Casa Systems vs. Comtech Telecommunications Corp | Casa Systems vs. Digi International | Casa Systems vs. KVH Industries |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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