Correlation Between KVH Industries and Air Products
Can any of the company-specific risk be diversified away by investing in both KVH Industries and Air Products 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 Air Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and Air Products and, you can compare the effects of market volatilities on KVH Industries and Air Products 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 Air Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and Air Products.
Diversification Opportunities for KVH Industries and Air Products
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KVH and Air is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and Air Products and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Products 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 Air Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Products has no effect on the direction of KVH Industries i.e., KVH Industries and Air Products go up and down completely randomly.
Pair Corralation between KVH Industries and Air Products
Given the investment horizon of 90 days KVH Industries is expected to generate 2.43 times less return on investment than Air Products. In addition to that, KVH Industries is 1.44 times more volatile than Air Products and. It trades about 0.04 of its total potential returns per unit of risk. Air Products and is currently generating about 0.14 per unit of volatility. If you would invest 24,444 in Air Products and on September 3, 2024 and sell it today you would earn a total of 8,989 from holding Air Products and or generate 36.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KVH Industries vs. Air Products and
Performance |
| Timeline |
| KVH Industries |
| Air Products |
KVH Industries and Air Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KVH Industries and Air Products
The main advantage of trading using opposite KVH Industries and Air Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, Air Products 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 Air Products will offset losses from the drop in Air Products' long position.| KVH Industries vs. Telesat Corp | KVH Industries vs. Comtech Telecommunications Corp | KVH Industries vs. Knowles Cor | KVH Industries vs. Ituran Location and |
| Air Products vs. PPG Industries | Air Products vs. Sherwin Williams Co | Air Products vs. Ecolab Inc | Air Products vs. Albemarle Corp |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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