Correlation Between KVH Industries and Ichor Holdings
Can any of the company-specific risk be diversified away by investing in both KVH Industries and Ichor Holdings 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 Ichor Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and Ichor Holdings, you can compare the effects of market volatilities on KVH Industries and Ichor Holdings 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 Ichor Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and Ichor Holdings.
Diversification Opportunities for KVH Industries and Ichor Holdings
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KVH and Ichor is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and Ichor Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichor Holdings 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 Ichor Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ichor Holdings has no effect on the direction of KVH Industries i.e., KVH Industries and Ichor Holdings go up and down completely randomly.
Pair Corralation between KVH Industries and Ichor Holdings
Given the investment horizon of 90 days KVH Industries is expected to under-perform the Ichor Holdings. But the stock apears to be less risky and, when comparing its historical volatility, KVH Industries is 1.11 times less risky than Ichor Holdings. The stock trades about -0.03 of its potential returns per unit of risk. The Ichor Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,933 in Ichor Holdings on August 30, 2024 and sell it today you would earn a total of 283.00 from holding Ichor Holdings or generate 9.65% 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. Ichor Holdings
Performance |
| Timeline |
| KVH Industries |
| Ichor Holdings |
KVH Industries and Ichor Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KVH Industries and Ichor Holdings
The main advantage of trading using opposite KVH Industries and Ichor Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, Ichor Holdings 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 Ichor Holdings will offset losses from the drop in Ichor Holdings' long position.| KVH Industries vs. NETGEAR | KVH Industries vs. Merck Company | KVH Industries vs. Pharvaris BV | KVH Industries vs. Brinker International |
| Ichor Holdings vs. Cohu Inc | Ichor Holdings vs. Entegris | Ichor Holdings vs. Kulicke and Soffa | Ichor Holdings vs. Photronics |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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