Correlation Between KVH Industries and Universal Display
Can any of the company-specific risk be diversified away by investing in both KVH Industries and Universal Display 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 Universal Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and Universal Display, you can compare the effects of market volatilities on KVH Industries and Universal Display 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 Universal Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and Universal Display.
Diversification Opportunities for KVH Industries and Universal Display
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KVH and Universal is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and Universal Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Display 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 Universal Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Display has no effect on the direction of KVH Industries i.e., KVH Industries and Universal Display go up and down completely randomly.
Pair Corralation between KVH Industries and Universal Display
Given the investment horizon of 90 days KVH Industries is expected to generate 0.81 times more return on investment than Universal Display. However, KVH Industries is 1.23 times less risky than Universal Display. It trades about 0.06 of its potential returns per unit of risk. Universal Display is currently generating about -0.01 per unit of risk. If you would invest 501.00 in KVH Industries on September 5, 2024 and sell it today you would earn a total of 83.00 from holding KVH Industries or generate 16.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KVH Industries vs. Universal Display
Performance |
| Timeline |
| KVH Industries |
| Universal Display |
KVH Industries and Universal Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KVH Industries and Universal Display
The main advantage of trading using opposite KVH Industries and Universal Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, Universal Display 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 Universal Display will offset losses from the drop in Universal Display's long position.| KVH Industries vs. Cambium Networks Corp | KVH Industries vs. Knowles Cor | KVH Industries vs. Ituran Location and | KVH Industries vs. Aviat Networks |
| Universal Display vs. Plexus Corp | Universal Display vs. Methode Electronics | Universal Display vs. Benchmark Electronics | Universal Display vs. Bel Fuse A |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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