Correlation Between KVH Industries and Emerson Radio
Can any of the company-specific risk be diversified away by investing in both KVH Industries and Emerson Radio 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 Emerson Radio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and Emerson Radio, you can compare the effects of market volatilities on KVH Industries and Emerson Radio 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 Emerson Radio. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and Emerson Radio.
Diversification Opportunities for KVH Industries and Emerson Radio
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KVH and Emerson is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and Emerson Radio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerson Radio 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 Emerson Radio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerson Radio has no effect on the direction of KVH Industries i.e., KVH Industries and Emerson Radio go up and down completely randomly.
Pair Corralation between KVH Industries and Emerson Radio
Given the investment horizon of 90 days KVH Industries is expected to generate 0.69 times more return on investment than Emerson Radio. However, KVH Industries is 1.44 times less risky than Emerson Radio. It trades about 0.04 of its potential returns per unit of risk. Emerson Radio is currently generating about -0.01 per unit of risk. If you would invest 484.00 in KVH Industries on August 29, 2024 and sell it today you would earn a total of 63.00 from holding KVH Industries or generate 13.02% 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. Emerson Radio
Performance |
| Timeline |
| KVH Industries |
| Emerson Radio |
KVH Industries and Emerson Radio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KVH Industries and Emerson Radio
The main advantage of trading using opposite KVH Industries and Emerson Radio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, Emerson Radio 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 Emerson Radio will offset losses from the drop in Emerson Radio's long position.| KVH Industries vs. NETGEAR | KVH Industries vs. Merck Company | KVH Industries vs. Pharvaris BV | KVH Industries vs. Brinker International |
| Emerson Radio vs. VOXX International | Emerson Radio vs. LG Display Co | Emerson Radio vs. Vizio Holding Corp | Emerson Radio vs. Turtle Beach 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |