Correlation Between KVH Industries and Citizens
Can any of the company-specific risk be diversified away by investing in both KVH Industries and Citizens 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 Citizens into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and Citizens, you can compare the effects of market volatilities on KVH Industries and Citizens 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 Citizens. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and Citizens.
Diversification Opportunities for KVH Industries and Citizens
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KVH and Citizens is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and Citizens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens 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 Citizens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens has no effect on the direction of KVH Industries i.e., KVH Industries and Citizens go up and down completely randomly.
Pair Corralation between KVH Industries and Citizens
Given the investment horizon of 90 days KVH Industries is expected to generate 2.06 times less return on investment than Citizens. But when comparing it to its historical volatility, KVH Industries is 1.75 times less risky than Citizens. It trades about 0.08 of its potential returns per unit of risk. Citizens is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 284.00 in Citizens on September 12, 2024 and sell it today you would earn a total of 130.00 from holding Citizens or generate 45.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KVH Industries vs. Citizens
Performance |
| Timeline |
| KVH Industries |
| Citizens |
KVH Industries and Citizens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KVH Industries and Citizens
The main advantage of trading using opposite KVH Industries and Citizens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, Citizens 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 Citizens will offset losses from the drop in Citizens' long position.| KVH Industries vs. Telesat Corp | KVH Industries vs. Comtech Telecommunications Corp | KVH Industries vs. Knowles Cor | KVH Industries vs. Ituran Location and |
| Citizens vs. Lincoln National | Citizens vs. Aflac Incorporated | Citizens vs. Unum Group | Citizens vs. Manulife Financial 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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