Correlation Between Franklin Street and KVH Industries
Can any of the company-specific risk be diversified away by investing in both Franklin Street 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 Franklin Street and KVH Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Street Properties and KVH Industries, you can compare the effects of market volatilities on Franklin Street 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 Franklin Street with a short position of KVH Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Street and KVH Industries.
Diversification Opportunities for Franklin Street and KVH Industries
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Franklin and KVH is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Street Properties and KVH Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KVH Industries and Franklin Street 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 Franklin Street Properties 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 Franklin Street i.e., Franklin Street and KVH Industries go up and down completely randomly.
Pair Corralation between Franklin Street and KVH Industries
Considering the 90-day investment horizon Franklin Street is expected to generate 54.78 times less return on investment than KVH Industries. In addition to that, Franklin Street is 1.49 times more volatile than KVH Industries. It trades about 0.01 of its total potential returns per unit of risk. KVH Industries is currently generating about 0.44 per unit of volatility. If you would invest 460.00 in KVH Industries on September 2, 2024 and sell it today you would earn a total of 91.00 from holding KVH Industries or generate 19.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Street Properties vs. KVH Industries
Performance |
| Timeline |
| Franklin Street Prop |
| KVH Industries |
Franklin Street and KVH Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Street and KVH Industries
The main advantage of trading using opposite Franklin Street and KVH Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Street 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.| Franklin Street vs. Equity Commonwealth | Franklin Street vs. Cousins Properties Incorporated | Franklin Street vs. Creative Media Community | Franklin Street vs. Highwoods Properties |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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