Correlation Between LIFE + and Keysight Technologies
Can any of the company-specific risk be diversified away by investing in both LIFE + 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 LIFE + and Keysight Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFE BANC SPLIT and Keysight Technologies, you can compare the effects of market volatilities on LIFE + 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 LIFE + with a short position of Keysight Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFE + and Keysight Technologies.
Diversification Opportunities for LIFE + and Keysight Technologies
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between LIFE and Keysight is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding LIFE BANC SPLIT and Keysight Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keysight Technologies and LIFE + 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 LIFE BANC SPLIT 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 LIFE + i.e., LIFE + and Keysight Technologies go up and down completely randomly.
Pair Corralation between LIFE + and Keysight Technologies
Assuming the 90 days horizon LIFE BANC SPLIT is expected to generate 1.19 times more return on investment than Keysight Technologies. However, LIFE + is 1.19 times more volatile than Keysight Technologies. It trades about 0.25 of its potential returns per unit of risk. Keysight Technologies is currently generating about 0.3 per unit of risk. If you would invest 545.00 in LIFE BANC SPLIT on September 2, 2024 and sell it today you would earn a total of 95.00 from holding LIFE BANC SPLIT or generate 17.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIFE BANC SPLIT vs. Keysight Technologies
Performance |
| Timeline |
| LIFE BANC SPLIT |
| Keysight Technologies |
LIFE + and Keysight Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFE + and Keysight Technologies
The main advantage of trading using opposite LIFE + and Keysight Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFE + 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 LIFE BANC SPLIT 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.| Keysight Technologies vs. Superior Plus Corp | Keysight Technologies vs. NMI Holdings | Keysight Technologies vs. Origin Agritech | Keysight Technologies vs. SIVERS SEMICONDUCTORS AB |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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