Correlation Between Keysight Technologies and RCM TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both Keysight Technologies and RCM 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 Keysight Technologies and RCM TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keysight Technologies and RCM TECHNOLOGIES, you can compare the effects of market volatilities on Keysight Technologies and RCM 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 Keysight Technologies with a short position of RCM TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keysight Technologies and RCM TECHNOLOGIES.
Diversification Opportunities for Keysight Technologies and RCM TECHNOLOGIES
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Keysight and RCM is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Keysight Technologies and RCM TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCM TECHNOLOGIES and Keysight Technologies 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 Keysight Technologies are associated (or correlated) with RCM TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RCM TECHNOLOGIES has no effect on the direction of Keysight Technologies i.e., Keysight Technologies and RCM TECHNOLOGIES go up and down completely randomly.
Pair Corralation between Keysight Technologies and RCM TECHNOLOGIES
Assuming the 90 days horizon Keysight Technologies is expected to generate 0.78 times more return on investment than RCM TECHNOLOGIES. However, Keysight Technologies is 1.27 times less risky than RCM TECHNOLOGIES. It trades about 0.15 of its potential returns per unit of risk. RCM TECHNOLOGIES is currently generating about 0.06 per unit of risk. If you would invest 15,382 in Keysight Technologies on September 12, 2024 and sell it today you would earn a total of 1,112 from holding Keysight Technologies or generate 7.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keysight Technologies vs. RCM TECHNOLOGIES
Performance |
| Timeline |
| Keysight Technologies |
| RCM TECHNOLOGIES |
Keysight Technologies and RCM TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keysight Technologies and RCM TECHNOLOGIES
The main advantage of trading using opposite Keysight Technologies and RCM TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keysight Technologies position performs unexpectedly, RCM 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 RCM TECHNOLOGIES will offset losses from the drop in RCM TECHNOLOGIES's long position.| Keysight Technologies vs. HEXAGON AB ADR1 | Keysight Technologies vs. Superior Plus Corp | Keysight Technologies vs. SIVERS SEMICONDUCTORS AB | Keysight Technologies vs. NorAm Drilling AS |
| RCM TECHNOLOGIES vs. Apple Inc | RCM TECHNOLOGIES vs. Apple Inc | RCM TECHNOLOGIES vs. Apple Inc | RCM TECHNOLOGIES vs. Apple Inc |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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