Correlation Between KVH Industries and Narragansett Electric
Can any of the company-specific risk be diversified away by investing in both KVH Industries and Narragansett Electric 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 Narragansett Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and The Narragansett Electric, you can compare the effects of market volatilities on KVH Industries and Narragansett Electric 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 Narragansett Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and Narragansett Electric.
Diversification Opportunities for KVH Industries and Narragansett Electric
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KVH and Narragansett is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and The Narragansett Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Narragansett Electric 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 Narragansett Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Narragansett Electric has no effect on the direction of KVH Industries i.e., KVH Industries and Narragansett Electric go up and down completely randomly.
Pair Corralation between KVH Industries and Narragansett Electric
If you would invest 546.00 in KVH Industries on October 28, 2024 and sell it today you would earn a total of 66.00 from holding KVH Industries or generate 12.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 2.56% |
| Values | Daily Returns |
KVH Industries vs. The Narragansett Electric
Performance |
| Timeline |
| KVH Industries |
| The Narragansett Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
KVH Industries and Narragansett Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KVH Industries and Narragansett Electric
The main advantage of trading using opposite KVH Industries and Narragansett Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, Narragansett Electric 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 Narragansett Electric will offset losses from the drop in Narragansett Electric'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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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