Correlation Between Aviat Networks and KVH Industries
Can any of the company-specific risk be diversified away by investing in both Aviat Networks and KVH Industries 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 Aviat Networks and KVH Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aviat Networks and KVH Industries, you can compare the effects of market volatilities on Aviat Networks and KVH Industries 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 Aviat Networks with a short position of KVH Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aviat Networks and KVH Industries.
Diversification Opportunities for Aviat Networks and KVH Industries
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aviat and KVH is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Aviat Networks and KVH Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KVH Industries and Aviat Networks 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 Aviat Networks are associated (or correlated) with KVH Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KVH Industries has no effect on the direction of Aviat Networks i.e., Aviat Networks and KVH Industries go up and down completely randomly.
Pair Corralation between Aviat Networks and KVH Industries
Given the investment horizon of 90 days Aviat Networks is expected to generate 1.29 times more return on investment than KVH Industries. However, Aviat Networks is 1.29 times more volatile than KVH Industries. It trades about 0.0 of its potential returns per unit of risk. KVH Industries is currently generating about -0.02 per unit of risk. If you would invest 3,306 in Aviat Networks on March 25, 2025 and sell it today you would lose (1,046) from holding Aviat Networks or give up 31.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aviat Networks vs. KVH Industries
Performance |
| Timeline |
| Aviat Networks |
| KVH Industries |
Aviat Networks and KVH Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aviat Networks and KVH Industries
The main advantage of trading using opposite Aviat Networks and KVH Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aviat Networks position performs unexpectedly, KVH Industries 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 KVH Industries will offset losses from the drop in KVH Industries' long position.| Aviat Networks vs. AudioCodes | Aviat Networks vs. Silicom | Aviat Networks vs. Gilat Satellite Networks | Aviat Networks vs. Knowles Cor |
| KVH Industries vs. Telesat Corp | KVH Industries vs. Comtech Telecommunications Corp | KVH Industries vs. Knowles Cor | KVH Industries vs. Ituran Location and |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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