Correlation Between KVH Industries and Silicom
Can any of the company-specific risk be diversified away by investing in both KVH Industries and Silicom 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 Silicom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and Silicom, you can compare the effects of market volatilities on KVH Industries and Silicom 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 Silicom. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and Silicom.
Diversification Opportunities for KVH Industries and Silicom
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KVH and Silicom is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and Silicom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicom 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 Silicom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicom has no effect on the direction of KVH Industries i.e., KVH Industries and Silicom go up and down completely randomly.
Pair Corralation between KVH Industries and Silicom
Given the investment horizon of 90 days KVH Industries is expected to generate 1.48 times less return on investment than Silicom. But when comparing it to its historical volatility, KVH Industries is 2.24 times less risky than Silicom. It trades about 0.26 of its potential returns per unit of risk. Silicom is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,537 in Silicom on November 2, 2024 and sell it today you would earn a total of 169.00 from holding Silicom or generate 11.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KVH Industries vs. Silicom
Performance |
| Timeline |
| KVH Industries |
| Silicom |
KVH Industries and Silicom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KVH Industries and Silicom
The main advantage of trading using opposite KVH Industries and Silicom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, Silicom 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 Silicom will offset losses from the drop in Silicom'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 |
| Silicom vs. Ituran Location and | Silicom vs. Sapiens International | Silicom vs. Allot Communications | Silicom vs. Radcom |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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