Correlation Between Neinor Homes and Keysight Technologies
Can any of the company-specific risk be diversified away by investing in both Neinor Homes 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 Neinor Homes and Keysight Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neinor Homes SA and Keysight Technologies, you can compare the effects of market volatilities on Neinor Homes 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 Neinor Homes with a short position of Keysight Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neinor Homes and Keysight Technologies.
Diversification Opportunities for Neinor Homes and Keysight Technologies
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Neinor and Keysight is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Neinor Homes SA and Keysight Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keysight Technologies and Neinor Homes 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 Neinor Homes SA 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 Neinor Homes i.e., Neinor Homes and Keysight Technologies go up and down completely randomly.
Pair Corralation between Neinor Homes and Keysight Technologies
Assuming the 90 days trading horizon Neinor Homes SA is expected to generate 0.89 times more return on investment than Keysight Technologies. However, Neinor Homes SA is 1.13 times less risky than Keysight Technologies. It trades about 0.12 of its potential returns per unit of risk. Keysight Technologies is currently generating about 0.05 per unit of risk. If you would invest 899.00 in Neinor Homes SA on September 4, 2024 and sell it today you would earn a total of 577.00 from holding Neinor Homes SA or generate 64.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neinor Homes SA vs. Keysight Technologies
Performance |
| Timeline |
| Neinor Homes SA |
| Keysight Technologies |
Neinor Homes and Keysight Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neinor Homes and Keysight Technologies
The main advantage of trading using opposite Neinor Homes and Keysight Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neinor Homes 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.| Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple Inc |
| Keysight Technologies vs. RCM TECHNOLOGIES | Keysight Technologies vs. NIPPON STEEL SPADR | Keysight Technologies vs. GFL ENVIRONM | Keysight Technologies vs. RELIANCE STEEL AL |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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