Correlation Between KVH Industries and Lincoln Educational
Can any of the company-specific risk be diversified away by investing in both KVH Industries and Lincoln Educational 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 Lincoln Educational into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and Lincoln Educational Services, you can compare the effects of market volatilities on KVH Industries and Lincoln Educational 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 Lincoln Educational. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and Lincoln Educational.
Diversification Opportunities for KVH Industries and Lincoln Educational
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KVH and Lincoln is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and Lincoln Educational Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lincoln Educational 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 Lincoln Educational. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lincoln Educational has no effect on the direction of KVH Industries i.e., KVH Industries and Lincoln Educational go up and down completely randomly.
Pair Corralation between KVH Industries and Lincoln Educational
Given the investment horizon of 90 days KVH Industries is expected to generate 0.99 times more return on investment than Lincoln Educational. However, KVH Industries is 1.01 times less risky than Lincoln Educational. It trades about 0.46 of its potential returns per unit of risk. Lincoln Educational Services is currently generating about 0.0 per unit of risk. If you would invest 470.00 in KVH Industries on September 12, 2024 and sell it today you would earn a total of 102.00 from holding KVH Industries or generate 21.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KVH Industries vs. Lincoln Educational Services
Performance |
| Timeline |
| KVH Industries |
| Lincoln Educational |
KVH Industries and Lincoln Educational Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KVH Industries and Lincoln Educational
The main advantage of trading using opposite KVH Industries and Lincoln Educational positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, Lincoln Educational 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 Lincoln Educational will offset losses from the drop in Lincoln Educational'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 |
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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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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