Correlation Between KVH Industries and DOMINION

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Can any of the company-specific risk be diversified away by investing in both KVH Industries and DOMINION 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 DOMINION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and DOMINION ENERGY INC, you can compare the effects of market volatilities on KVH Industries and DOMINION 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 DOMINION. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and DOMINION.

Diversification Opportunities for KVH Industries and DOMINION

-0.03
  Correlation Coefficient

Good diversification

The 3 months correlation between KVH and DOMINION is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and DOMINION ENERGY INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DOMINION ENERGY INC 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 DOMINION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DOMINION ENERGY INC has no effect on the direction of KVH Industries i.e., KVH Industries and DOMINION go up and down completely randomly.

Pair Corralation between KVH Industries and DOMINION

Given the investment horizon of 90 days KVH Industries is expected to generate 0.48 times more return on investment than DOMINION. However, KVH Industries is 2.1 times less risky than DOMINION. It trades about 0.44 of its potential returns per unit of risk. DOMINION ENERGY INC is currently generating about -0.2 per unit of risk. If you would invest  460.00  in KVH Industries on September 2, 2024 and sell it today you would earn a total of  91.00  from holding KVH Industries or generate 19.78% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy52.38%
ValuesDaily Returns

KVH Industries  vs.  DOMINION ENERGY INC

 Performance 
       Timeline  
KVH Industries 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in KVH Industries are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain technical indicators, KVH Industries demonstrated solid returns over the last few months and may actually be approaching a breakup point.
DOMINION ENERGY INC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days DOMINION ENERGY INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for DOMINION ENERGY INC investors.

KVH Industries and DOMINION Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with KVH Industries and DOMINION

The main advantage of trading using opposite KVH Industries and DOMINION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, DOMINION 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 DOMINION will offset losses from the drop in DOMINION's long position.
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The idea behind KVH Industries and DOMINION ENERGY INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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