Correlation Between Digi International and KVH Industries
Can any of the company-specific risk be diversified away by investing in both Digi International 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 Digi International and KVH Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digi International and KVH Industries, you can compare the effects of market volatilities on Digi International 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 Digi International with a short position of KVH Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digi International and KVH Industries.
Diversification Opportunities for Digi International and KVH Industries
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Digi and KVH is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Digi International and KVH Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KVH Industries and Digi International 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 Digi International 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 Digi International i.e., Digi International and KVH Industries go up and down completely randomly.
Pair Corralation between Digi International and KVH Industries
Given the investment horizon of 90 days Digi International is expected to under-perform the KVH Industries. In addition to that, Digi International is 1.11 times more volatile than KVH Industries. It trades about -0.14 of its total potential returns per unit of risk. KVH Industries is currently generating about 0.34 per unit of volatility. 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digi International vs. KVH Industries
Performance |
| Timeline |
| Digi International |
| KVH Industries |
Digi International and KVH Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digi International and KVH Industries
The main advantage of trading using opposite Digi International and KVH Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digi International 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.| Digi International vs. Extreme Networks | Digi International vs. Ciena Corp | Digi International vs. Harmonic | Digi International vs. Comtech Telecommunications Corp |
| KVH Industries vs. Telesat Corp | KVH Industries vs. Comtech Telecommunications Corp | KVH Industries vs. Knowles Cor | KVH Industries vs. Ituran Location and |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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