Correlation Between KVH Industries and Harmonic
Can any of the company-specific risk be diversified away by investing in both KVH Industries and Harmonic 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 Harmonic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and Harmonic, you can compare the effects of market volatilities on KVH Industries and Harmonic 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 Harmonic. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and Harmonic.
Diversification Opportunities for KVH Industries and Harmonic
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between KVH and Harmonic is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and Harmonic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmonic 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 Harmonic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmonic has no effect on the direction of KVH Industries i.e., KVH Industries and Harmonic go up and down completely randomly.
Pair Corralation between KVH Industries and Harmonic
Given the investment horizon of 90 days KVH Industries is expected to under-perform the Harmonic. But the stock apears to be less risky and, when comparing its historical volatility, KVH Industries is 1.19 times less risky than Harmonic. The stock trades about -0.03 of its potential returns per unit of risk. The Harmonic is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,362 in Harmonic on August 27, 2024 and sell it today you would lose (115.00) from holding Harmonic or give up 8.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KVH Industries vs. Harmonic
Performance |
| Timeline |
| KVH Industries |
| Harmonic |
KVH Industries and Harmonic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KVH Industries and Harmonic
The main advantage of trading using opposite KVH Industries and Harmonic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, Harmonic 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 Harmonic will offset losses from the drop in Harmonic's long position.| KVH Industries vs. Ichor Holdings | KVH Industries vs. Fabrinet | KVH Industries vs. Hello Group | KVH Industries vs. Ultra Clean Holdings |
| Harmonic vs. NETGEAR | Harmonic vs. Juniper Networks | Harmonic vs. Digi International | Harmonic vs. Clearfield |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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