Correlation Between Broadstone Net and KVH Industries

Can any of the company-specific risk be diversified away by investing in both Broadstone Net 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 Broadstone Net and KVH Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Broadstone Net Lease and KVH Industries, you can compare the effects of market volatilities on Broadstone Net 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 Broadstone Net with a short position of KVH Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadstone Net and KVH Industries.

Diversification Opportunities for Broadstone Net and KVH Industries

-0.55

Correlation Coefficient

Broadstone Net  KVH Industries

Excellent diversification

The 3 months correlation between Broadstone and KVH is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Broadstone Net Lease and KVH Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KVH Industries and Broadstone Net 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 Broadstone Net Lease 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 Broadstone Net i.e., Broadstone Net and KVH Industries go up and down completely randomly.

Pair Corralation between Broadstone Net and KVH Industries

Considering the 90-day investment horizon Broadstone Net Lease is expected to generate 0.65 times more return on investment than KVH Industries. However, Broadstone Net Lease is 1.53 times less risky than KVH Industries. It trades about 0.03 of its potential returns per unit of risk. KVH Industries is currently generating about -0.08 per unit of risk. If you would invest  1,494  in Broadstone Net Lease on January 10, 2025 and sell it today you would earn a total of  42.00  from holding Broadstone Net Lease or generate 2.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Broadstone Net Lease  vs.  KVH Industries

Broadstone Net Lease

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Broadstone Net Lease are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Broadstone Net is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

KVH Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days KVH Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in May 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Broadstone Net and KVH Industries

The main advantage of trading using opposite Broadstone Net and KVH Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadstone Net 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.

The idea behind Broadstone Net Lease and KVH Industries 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.