Correlation Between KVH Industries and Marchex
Can any of the company-specific risk be diversified away by investing in both KVH Industries and Marchex 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 Marchex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and Marchex, you can compare the effects of market volatilities on KVH Industries and Marchex 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 Marchex. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and Marchex.
Diversification Opportunities for KVH Industries and Marchex
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KVH and Marchex is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and Marchex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marchex 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 Marchex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marchex has no effect on the direction of KVH Industries i.e., KVH Industries and Marchex go up and down completely randomly.
Pair Corralation between KVH Industries and Marchex
Given the investment horizon of 90 days KVH Industries is expected to under-perform the Marchex. But the stock apears to be less risky and, when comparing its historical volatility, KVH Industries is 1.27 times less risky than Marchex. The stock trades about -0.03 of its potential returns per unit of risk. The Marchex is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 183.00 in Marchex on September 2, 2024 and sell it today you would lose (1.00) from holding Marchex or give up 0.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KVH Industries vs. Marchex
Performance |
| Timeline |
| KVH Industries |
| Marchex |
KVH Industries and Marchex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KVH Industries and Marchex
The main advantage of trading using opposite KVH Industries and Marchex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, Marchex 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 Marchex will offset losses from the drop in Marchex'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 |
| Marchex vs. Entravision Communications | Marchex vs. Direct Digital Holdings | Marchex vs. Cimpress NV | Marchex vs. Townsquare Media |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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