Correlation Between KVH Industries and Brunswick Corp
Can any of the company-specific risk be diversified away by investing in both KVH Industries and Brunswick Corp 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 Brunswick Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and Brunswick Corp, you can compare the effects of market volatilities on KVH Industries and Brunswick Corp 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 Brunswick Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and Brunswick Corp.
Diversification Opportunities for KVH Industries and Brunswick Corp
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KVH and Brunswick is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and Brunswick Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunswick Corp 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 Brunswick Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunswick Corp has no effect on the direction of KVH Industries i.e., KVH Industries and Brunswick Corp go up and down completely randomly.
Pair Corralation between KVH Industries and Brunswick Corp
Given the investment horizon of 90 days KVH Industries is expected to generate 3.19 times more return on investment than Brunswick Corp. However, KVH Industries is 3.19 times more volatile than Brunswick Corp. It trades about 0.32 of its potential returns per unit of risk. Brunswick Corp is currently generating about -0.14 per unit of risk. If you would invest 476.00 in KVH Industries on August 28, 2024 and sell it today you would earn a total of 72.00 from holding KVH Industries or generate 15.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
KVH Industries vs. Brunswick Corp
Performance |
| Timeline |
| KVH Industries |
| Brunswick Corp |
KVH Industries and Brunswick Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KVH Industries and Brunswick Corp
The main advantage of trading using opposite KVH Industries and Brunswick Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, Brunswick Corp 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 Brunswick Corp will offset losses from the drop in Brunswick Corp's long position.| KVH Industries vs. Ichor Holdings | KVH Industries vs. Fabrinet | KVH Industries vs. Hello Group | KVH Industries vs. Ultra Clean Holdings |
| Brunswick Corp vs. Zhihu Inc ADR | Brunswick Corp vs. Playstudios | Brunswick Corp vs. GameStop Corp | Brunswick Corp vs. KVH Industries |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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