Correlation Between KVH Industries and Frequency Electronics
Can any of the company-specific risk be diversified away by investing in both KVH Industries and Frequency Electronics 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 Frequency Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and Frequency Electronics, you can compare the effects of market volatilities on KVH Industries and Frequency Electronics 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 Frequency Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and Frequency Electronics.
Diversification Opportunities for KVH Industries and Frequency Electronics
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KVH and Frequency is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and Frequency Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frequency Electronics 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 Frequency Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frequency Electronics has no effect on the direction of KVH Industries i.e., KVH Industries and Frequency Electronics go up and down completely randomly.
Pair Corralation between KVH Industries and Frequency Electronics
Given the investment horizon of 90 days KVH Industries is expected to under-perform the Frequency Electronics. But the stock apears to be less risky and, when comparing its historical volatility, KVH Industries is 1.02 times less risky than Frequency Electronics. The stock trades about -0.05 of its potential returns per unit of risk. The Frequency Electronics is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 615.00 in Frequency Electronics on August 24, 2024 and sell it today you would earn a total of 694.00 from holding Frequency Electronics or generate 112.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KVH Industries vs. Frequency Electronics
Performance |
| Timeline |
| KVH Industries |
| Frequency Electronics |
KVH Industries and Frequency Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KVH Industries and Frequency Electronics
The main advantage of trading using opposite KVH Industries and Frequency Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, Frequency Electronics 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 Frequency Electronics will offset losses from the drop in Frequency Electronics' long position.| KVH Industries vs. Telesat Corp | KVH Industries vs. Comtech Telecommunications Corp | KVH Industries vs. Knowles Cor | KVH Industries vs. Ituran Location and |
| Frequency Electronics vs. BK Technologies | Frequency Electronics vs. Actelis Networks | Frequency Electronics vs. Lantronix | Frequency Electronics 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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