Correlation Between KVH Industries and XCHG Limited
Can any of the company-specific risk be diversified away by investing in both KVH Industries and XCHG Limited 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 XCHG Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KVH Industries and XCHG Limited American, you can compare the effects of market volatilities on KVH Industries and XCHG Limited 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 XCHG Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and XCHG Limited.
Diversification Opportunities for KVH Industries and XCHG Limited
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between KVH and XCHG is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and XCHG Limited American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XCHG Limited American 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 XCHG Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XCHG Limited American has no effect on the direction of KVH Industries i.e., KVH Industries and XCHG Limited go up and down completely randomly.
Pair Corralation between KVH Industries and XCHG Limited
Given the investment horizon of 90 days KVH Industries is expected to generate 0.27 times more return on investment than XCHG Limited. However, KVH Industries is 3.73 times less risky than XCHG Limited. It trades about 0.53 of its potential returns per unit of risk. XCHG Limited American is currently generating about -0.11 per unit of risk. If you would invest 457.00 in KVH Industries on September 4, 2024 and sell it today you would earn a total of 118.00 from holding KVH Industries or generate 25.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KVH Industries vs. XCHG Limited American
Performance |
| Timeline |
| KVH Industries |
| XCHG Limited American |
KVH Industries and XCHG Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KVH Industries and XCHG Limited
The main advantage of trading using opposite KVH Industries and XCHG Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, XCHG Limited 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 XCHG Limited will offset losses from the drop in XCHG Limited'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 |
| XCHG Limited vs. Small Cap Premium | XCHG Limited vs. Lincoln Educational Services | XCHG Limited vs. PennantPark Floating Rate | XCHG Limited vs. Kite Realty Group |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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