Correlation Between KVH Industries and Iteris
Can any of the company-specific risk be diversified away by investing in both KVH Industries and Iteris 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 Iteris into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and Iteris Inc, you can compare the effects of market volatilities on KVH Industries and Iteris 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 Iteris. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and Iteris.
Diversification Opportunities for KVH Industries and Iteris
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KVH and Iteris is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and Iteris Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iteris Inc 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 Iteris. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iteris Inc has no effect on the direction of KVH Industries i.e., KVH Industries and Iteris go up and down completely randomly.
Pair Corralation between KVH Industries and Iteris
Given the investment horizon of 90 days KVH Industries is expected to generate 2.7 times less return on investment than Iteris. But when comparing it to its historical volatility, KVH Industries is 2.77 times less risky than Iteris. It trades about 0.38 of its potential returns per unit of risk. Iteris Inc is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 22,865 in Iteris Inc on August 31, 2024 and sell it today you would earn a total of 3,784 from holding Iteris Inc or generate 16.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 36.36% |
| Values | Daily Returns |
KVH Industries vs. Iteris Inc
Performance |
| Timeline |
| KVH Industries |
| Iteris Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
KVH Industries and Iteris Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KVH Industries and Iteris
The main advantage of trading using opposite KVH Industries and Iteris positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, Iteris 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 Iteris will offset losses from the drop in Iteris' long position.| KVH Industries vs. Telesat Corp | KVH Industries vs. Comtech Telecommunications Corp | KVH Industries vs. Knowles Cor | KVH Industries vs. Ituran Location and |
| Iteris vs. Optical Cable | Iteris vs. KVH Industries | Iteris vs. Knowles Cor | Iteris vs. Comtech Telecommunications Corp |
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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