Correlation Between KVH Industries and BCE
Can any of the company-specific risk be diversified away by investing in both KVH Industries and BCE 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 BCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and BCE Inc, you can compare the effects of market volatilities on KVH Industries and BCE 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 BCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and BCE.
Diversification Opportunities for KVH Industries and BCE
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KVH and BCE is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and BCE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCE Inc 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 BCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCE Inc has no effect on the direction of KVH Industries i.e., KVH Industries and BCE go up and down completely randomly.
Pair Corralation between KVH Industries and BCE
Given the investment horizon of 90 days KVH Industries is expected to under-perform the BCE. In addition to that, KVH Industries is 2.5 times more volatile than BCE Inc. It trades about -0.04 of its total potential returns per unit of risk. BCE Inc is currently generating about -0.07 per unit of volatility. If you would invest 4,068 in BCE Inc on August 24, 2024 and sell it today you would lose (1,400) from holding BCE Inc or give up 34.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KVH Industries vs. BCE Inc
Performance |
| Timeline |
| KVH Industries |
| BCE Inc |
KVH Industries and BCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KVH Industries and BCE
The main advantage of trading using opposite KVH Industries and BCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, BCE 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 BCE will offset losses from the drop in BCE's long position.| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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