Correlation Between KVH Industries and Gap,
Can any of the company-specific risk be diversified away by investing in both KVH Industries and Gap, 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 Gap, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and The Gap,, you can compare the effects of market volatilities on KVH Industries and Gap, 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 Gap,. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and Gap,.
Diversification Opportunities for KVH Industries and Gap,
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KVH and Gap, is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and The Gap, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gap, 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 Gap,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gap, has no effect on the direction of KVH Industries i.e., KVH Industries and Gap, go up and down completely randomly.
Pair Corralation between KVH Industries and Gap,
Given the investment horizon of 90 days KVH Industries is expected to generate 0.56 times more return on investment than Gap,. However, KVH Industries is 1.8 times less risky than Gap,. It trades about 0.48 of its potential returns per unit of risk. The Gap, is currently generating about 0.18 per unit of risk. If you would invest 457.00 in KVH Industries on September 3, 2024 and sell it today you would earn a total of 94.00 from holding KVH Industries or generate 20.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KVH Industries vs. The Gap,
Performance |
| Timeline |
| KVH Industries |
| Gap, |
KVH Industries and Gap, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KVH Industries and Gap,
The main advantage of trading using opposite KVH Industries and Gap, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, Gap, 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 Gap, will offset losses from the drop in Gap,'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 |
| Gap, vs. Centessa Pharmaceuticals PLC | Gap, vs. Kandi Technologies Group | Gap, vs. Digi International | Gap, vs. Reservoir Media |
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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