Correlation Between KVH Industries and Weibo Corp
Can any of the company-specific risk be diversified away by investing in both KVH Industries and Weibo Corp 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 Weibo Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and Weibo Corp, you can compare the effects of market volatilities on KVH Industries and Weibo Corp 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 Weibo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and Weibo Corp.
Diversification Opportunities for KVH Industries and Weibo Corp
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KVH and Weibo is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and Weibo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weibo Corp 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 Weibo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weibo Corp has no effect on the direction of KVH Industries i.e., KVH Industries and Weibo Corp go up and down completely randomly.
Pair Corralation between KVH Industries and Weibo Corp
Given the investment horizon of 90 days KVH Industries is expected to generate 0.72 times more return on investment than Weibo Corp. However, KVH Industries is 1.4 times less risky than Weibo Corp. It trades about 0.06 of its potential returns per unit of risk. Weibo Corp is currently generating about 0.04 per unit of risk. If you would invest 472.00 in KVH Industries on November 3, 2024 and sell it today you would earn a total of 139.00 from holding KVH Industries or generate 29.45% 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. Weibo Corp
Performance |
| Timeline |
| KVH Industries |
| Weibo Corp |
KVH Industries and Weibo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KVH Industries and Weibo Corp
The main advantage of trading using opposite KVH Industries and Weibo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, Weibo Corp 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 Weibo Corp will offset losses from the drop in Weibo Corp'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 |
| Weibo Corp vs. YY Inc Class | Weibo Corp vs. DouYu International Holdings | Weibo Corp vs. Tencent Music Entertainment | Weibo Corp vs. Autohome |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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