Correlation Between KVH Industries and Keysight Technologies

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

By analyzing existing cross correlation between KVH Industries and Keysight Technologies, you can compare the effects of market volatilities on KVH Industries and Keysight Technologies 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 Keysight Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of KVH Industries and Keysight Technologies.

Diversification Opportunities for KVH Industries and Keysight Technologies

0.57

Correlation Coefficient

KVH Industries  Keysight Technologies

Very weak diversification

The 3 months correlation between KVH and Keysight is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding KVH Industries and Keysight Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keysight Technologies 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 Keysight Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keysight Technologies has no effect on the direction of KVH Industries i.e., KVH Industries and Keysight Technologies go up and down completely randomly.

Pair Corralation between KVH Industries and Keysight Technologies

Given the investment horizon of 90 days KVH Industries is expected to under-perform the Keysight Technologies. But the stock apears to be less risky and, when comparing its historical volatility, KVH Industries is 1.05 times less risky than Keysight Technologies. The stock trades about -0.1 of its potential returns per unit of risk. The Keysight Technologies is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  16,245  in Keysight Technologies on May 6, 2025 and sell it today you would lose (181.00) from holding Keysight Technologies or give up 1.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

KVH Industries  vs.  Keysight Technologies

KVH Industries

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in KVH Industries are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, KVH Industries is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Keysight Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Keysight Technologies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Keysight Technologies may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with KVH Industries and Keysight Technologies

The main advantage of trading using opposite KVH Industries and Keysight Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KVH Industries position performs unexpectedly, Keysight Technologies 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 Keysight Technologies will offset losses from the drop in Keysight Technologies' long position.

The idea behind KVH Industries and Keysight Technologies 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.