Correlation Between KVH Industries and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both KVH Industries and Eastman Chemical 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 Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and Eastman Chemical, you can compare the effects of market volatilities on KVH Industries and Eastman Chemical 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 Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and Eastman Chemical.
Diversification Opportunities for KVH Industries and Eastman Chemical
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KVH and Eastman is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and Eastman Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical 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 Eastman Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastman Chemical has no effect on the direction of KVH Industries i.e., KVH Industries and Eastman Chemical go up and down completely randomly.
Pair Corralation between KVH Industries and Eastman Chemical
Given the investment horizon of 90 days KVH Industries is expected to generate 1.81 times more return on investment than Eastman Chemical. However, KVH Industries is 1.81 times more volatile than Eastman Chemical. It trades about 0.14 of its potential returns per unit of risk. Eastman Chemical is currently generating about -0.05 per unit of risk. If you would invest 485.00 in KVH Industries on September 3, 2024 and sell it today you would earn a total of 66.00 from holding KVH Industries or generate 13.61% 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. Eastman Chemical
Performance |
| Timeline |
| KVH Industries |
| Eastman Chemical |
KVH Industries and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KVH Industries and Eastman Chemical
The main advantage of trading using opposite KVH Industries and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, Eastman Chemical 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 Eastman Chemical will offset losses from the drop in Eastman Chemical'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 |
| Eastman Chemical vs. SPACE | Eastman Chemical vs. Bayview Acquisition Corp | Eastman Chemical vs. T Rowe Price | Eastman Chemical vs. Ampleforth |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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