Correlation Between KVH Industries and Analog Devices
Can any of the company-specific risk be diversified away by investing in both KVH Industries and Analog Devices 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 KVH Industries and Analog Devices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and Analog Devices, you can compare the effects of market volatilities on KVH Industries and Analog Devices 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 KVH Industries with a short position of Analog Devices. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and Analog Devices.
Diversification Opportunities for KVH Industries and Analog Devices
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KVH and Analog is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and Analog Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analog Devices and KVH Industries 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 KVH Industries are associated (or correlated) with Analog Devices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analog Devices has no effect on the direction of KVH Industries i.e., KVH Industries and Analog Devices go up and down completely randomly.
Pair Corralation between KVH Industries and Analog Devices
Given the investment horizon of 90 days KVH Industries is expected to under-perform the Analog Devices. In addition to that, KVH Industries is 1.54 times more volatile than Analog Devices. It trades about -0.04 of its total potential returns per unit of risk. Analog Devices is currently generating about 0.04 per unit of volatility. If you would invest 17,482 in Analog Devices on August 31, 2024 and sell it today you would earn a total of 4,235 from holding Analog Devices or generate 24.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KVH Industries vs. Analog Devices
Performance |
| Timeline |
| KVH Industries |
| Analog Devices |
KVH Industries and Analog Devices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KVH Industries and Analog Devices
The main advantage of trading using opposite KVH Industries and Analog Devices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, Analog Devices 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 Analog Devices will offset losses from the drop in Analog Devices' long position.| KVH Industries vs. Telesat Corp | KVH Industries vs. Comtech Telecommunications Corp | KVH Industries vs. Knowles Cor | KVH Industries vs. Ituran Location and |
| Analog Devices vs. MACOM Technology Solutions | Analog Devices vs. FormFactor | Analog Devices vs. MaxLinear | Analog Devices vs. nLIGHT Inc |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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