Correlation Between CVD Equipment and Kornit Digital
Can any of the company-specific risk be diversified away by investing in both CVD Equipment and Kornit Digital 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 CVD Equipment and Kornit Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVD Equipment and Kornit Digital, you can compare the effects of market volatilities on CVD Equipment and Kornit Digital 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 CVD Equipment with a short position of Kornit Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVD Equipment and Kornit Digital.
Diversification Opportunities for CVD Equipment and Kornit Digital
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CVD and Kornit is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding CVD Equipment and Kornit Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kornit Digital and CVD Equipment 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 CVD Equipment are associated (or correlated) with Kornit Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kornit Digital has no effect on the direction of CVD Equipment i.e., CVD Equipment and Kornit Digital go up and down completely randomly.
Pair Corralation between CVD Equipment and Kornit Digital
Considering the 90-day investment horizon CVD Equipment is expected to generate 7.03 times less return on investment than Kornit Digital. But when comparing it to its historical volatility, CVD Equipment is 1.1 times less risky than Kornit Digital. It trades about 0.04 of its potential returns per unit of risk. Kornit Digital is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,363 in Kornit Digital on August 31, 2024 and sell it today you would earn a total of 773.00 from holding Kornit Digital or generate 32.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVD Equipment vs. Kornit Digital
Performance |
| Timeline |
| CVD Equipment |
| Kornit Digital |
CVD Equipment and Kornit Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVD Equipment and Kornit Digital
The main advantage of trading using opposite CVD Equipment and Kornit Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVD Equipment position performs unexpectedly, Kornit Digital 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 Kornit Digital will offset losses from the drop in Kornit Digital's long position.| CVD Equipment vs. Standex International | CVD Equipment vs. Intevac | CVD Equipment vs. Thermon Group Holdings | CVD Equipment vs. Enpro 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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