Correlation Between KVH Industries and Lantronix
Can any of the company-specific risk be diversified away by investing in both KVH Industries and Lantronix 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 Lantronix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and Lantronix, you can compare the effects of market volatilities on KVH Industries and Lantronix 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 Lantronix. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and Lantronix.
Diversification Opportunities for KVH Industries and Lantronix
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KVH and Lantronix is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and Lantronix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lantronix 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 Lantronix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lantronix has no effect on the direction of KVH Industries i.e., KVH Industries and Lantronix go up and down completely randomly.
Pair Corralation between KVH Industries and Lantronix
Given the investment horizon of 90 days KVH Industries is expected to generate 0.31 times more return on investment than Lantronix. However, KVH Industries is 3.23 times less risky than Lantronix. It trades about 0.32 of its potential returns per unit of risk. Lantronix is currently generating about -0.18 per unit of risk. If you would invest 476.00 in KVH Industries on August 27, 2024 and sell it today you would earn a total of 72.00 from holding KVH Industries or generate 15.13% 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. Lantronix
Performance |
| Timeline |
| KVH Industries |
| Lantronix |
KVH Industries and Lantronix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KVH Industries and Lantronix
The main advantage of trading using opposite KVH Industries and Lantronix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, Lantronix 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 Lantronix will offset losses from the drop in Lantronix's long position.| KVH Industries vs. Ichor Holdings | KVH Industries vs. Fabrinet | KVH Industries vs. Hello Group | KVH Industries vs. Ultra Clean Holdings |
| Lantronix vs. LightPath Technologies | Lantronix vs. Luna Innovations Incorporated | Lantronix vs. Identiv | Lantronix vs. VOXX International |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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