Correlation Between KVH Industries and National CineMedia
Can any of the company-specific risk be diversified away by investing in both KVH Industries and National CineMedia 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 National CineMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and National CineMedia, you can compare the effects of market volatilities on KVH Industries and National CineMedia 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 National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and National CineMedia.
Diversification Opportunities for KVH Industries and National CineMedia
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between KVH and National is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia 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 National CineMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National CineMedia has no effect on the direction of KVH Industries i.e., KVH Industries and National CineMedia go up and down completely randomly.
Pair Corralation between KVH Industries and National CineMedia
Given the investment horizon of 90 days KVH Industries is expected to under-perform the National CineMedia. But the stock apears to be less risky and, when comparing its historical volatility, KVH Industries is 2.8 times less risky than National CineMedia. The stock trades about -0.04 of its potential returns per unit of risk. The National CineMedia is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 436.00 in National CineMedia on August 24, 2024 and sell it today you would earn a total of 252.00 from holding National CineMedia or generate 57.8% 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. National CineMedia
Performance |
| Timeline |
| KVH Industries |
| National CineMedia |
KVH Industries and National CineMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KVH Industries and National CineMedia
The main advantage of trading using opposite KVH Industries and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, National CineMedia 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 National CineMedia will offset losses from the drop in National CineMedia'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 |
| National CineMedia vs. MGO Global Common | National CineMedia vs. Baosheng Media Group | National CineMedia vs. Impact Fusion International | National CineMedia vs. ZW Data Action |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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