Correlation Between KVH Industries and Clearfield
Can any of the company-specific risk be diversified away by investing in both KVH Industries and Clearfield 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 Clearfield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and Clearfield, you can compare the effects of market volatilities on KVH Industries and Clearfield 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 Clearfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and Clearfield.
Diversification Opportunities for KVH Industries and Clearfield
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KVH and Clearfield is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and Clearfield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearfield 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 Clearfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearfield has no effect on the direction of KVH Industries i.e., KVH Industries and Clearfield go up and down completely randomly.
Pair Corralation between KVH Industries and Clearfield
Given the investment horizon of 90 days KVH Industries is expected to generate 0.89 times more return on investment than Clearfield. However, KVH Industries is 1.12 times less risky than Clearfield. It trades about -0.03 of its potential returns per unit of risk. Clearfield is currently generating about -0.07 per unit of risk. If you would invest 1,011 in KVH Industries on August 27, 2024 and sell it today you would lose (486.00) from holding KVH Industries or give up 48.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KVH Industries vs. Clearfield
Performance |
| Timeline |
| KVH Industries |
| Clearfield |
KVH Industries and Clearfield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KVH Industries and Clearfield
The main advantage of trading using opposite KVH Industries and Clearfield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, Clearfield 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 Clearfield will offset losses from the drop in Clearfield's long position.| KVH Industries vs. Ichor Holdings | KVH Industries vs. Fabrinet | KVH Industries vs. Hello Group | KVH Industries vs. Ultra Clean Holdings |
| Clearfield vs. Ichor Holdings | Clearfield vs. Fabrinet | Clearfield vs. Hello Group | Clearfield vs. Ultra Clean Holdings |
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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