Correlation Between Flex and KVH Industries
Can any of the company-specific risk be diversified away by investing in both Flex 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 Flex and KVH Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flex and KVH Industries, you can compare the effects of market volatilities on Flex 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 Flex with a short position of KVH Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flex and KVH Industries.
Diversification Opportunities for Flex and KVH Industries
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Flex and KVH is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Flex and KVH Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KVH Industries and Flex 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 Flex 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 Flex i.e., Flex and KVH Industries go up and down completely randomly.
Pair Corralation between Flex and KVH Industries
Given the investment horizon of 90 days Flex is expected to generate 1.08 times less return on investment than KVH Industries. In addition to that, Flex is 1.34 times more volatile than KVH Industries. It trades about 0.21 of its total potential returns per unit of risk. KVH Industries is currently generating about 0.31 per unit of volatility. If you would invest 476.00 in KVH Industries on August 29, 2024 and sell it today you would earn a total of 71.00 from holding KVH Industries or generate 14.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flex vs. KVH Industries
Performance |
| Timeline |
| Flex |
| KVH Industries |
Flex and KVH Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flex and KVH Industries
The main advantage of trading using opposite Flex and KVH Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flex 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.The idea behind Flex and KVH Industries pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| KVH Industries vs. NETGEAR | KVH Industries vs. Merck Company | KVH Industries vs. Pharvaris BV | KVH Industries vs. Brinker International |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |