Correlation Between KVH Industries and NLIGHT
Can any of the company-specific risk be diversified away by investing in both KVH Industries and NLIGHT 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 NLIGHT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and nLIGHT Inc, you can compare the effects of market volatilities on KVH Industries and NLIGHT 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 NLIGHT. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and NLIGHT.
Diversification Opportunities for KVH Industries and NLIGHT
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KVH and NLIGHT is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and nLIGHT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on nLIGHT 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 NLIGHT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of nLIGHT Inc has no effect on the direction of KVH Industries i.e., KVH Industries and NLIGHT go up and down completely randomly.
Pair Corralation between KVH Industries and NLIGHT
Given the investment horizon of 90 days KVH Industries is expected to generate 0.47 times more return on investment than NLIGHT. However, KVH Industries is 2.15 times less risky than NLIGHT. It trades about 0.13 of its potential returns per unit of risk. nLIGHT Inc is currently generating about 0.03 per unit of risk. If you would invest 449.00 in KVH Industries on November 3, 2024 and sell it today you would earn a total of 162.00 from holding KVH Industries or generate 36.08% 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. nLIGHT Inc
Performance |
Timeline |
KVH Industries |
nLIGHT Inc |
KVH Industries and NLIGHT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KVH Industries and NLIGHT
The main advantage of trading using opposite KVH Industries and NLIGHT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, NLIGHT 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 NLIGHT will offset losses from the drop in NLIGHT'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 |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Bonds Directory Find actively traded corporate debentures issued by US companies |