Correlation Between KVH Industries and Vita Coco

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

Diversification Opportunities for KVH Industries and Vita Coco

0.45
  Correlation Coefficient

Very weak diversification

The 3 months correlation between KVH and Vita is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and Vita Coco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vita Coco 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 Vita Coco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vita Coco has no effect on the direction of KVH Industries i.e., KVH Industries and Vita Coco go up and down completely randomly.

Pair Corralation between KVH Industries and Vita Coco

Given the investment horizon of 90 days KVH Industries is expected to generate 0.8 times more return on investment than Vita Coco. However, KVH Industries is 1.25 times less risky than Vita Coco. It trades about 0.07 of its potential returns per unit of risk. Vita Coco is currently generating about -0.03 per unit of risk. If you would invest  500.00  in KVH Industries on May 7, 2025 and sell it today you would earn a total of  31.00  from holding KVH Industries or generate 6.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

KVH Industries  vs.  Vita Coco

 Performance 
       Timeline  
KVH Industries 

Risk-Adjusted Performance

Mild

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in KVH Industries are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating technical indicators, KVH Industries may actually be approaching a critical reversion point that can send shares even higher in September 2025.
Vita Coco 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Vita Coco has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Vita Coco is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

KVH Industries and Vita Coco Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with KVH Industries and Vita Coco

The main advantage of trading using opposite KVH Industries and Vita Coco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, Vita Coco 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 Vita Coco will offset losses from the drop in Vita Coco's long position.
The idea behind KVH Industries and Vita Coco 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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