Correlation Between Coherent and Keysight Technologies
Can any of the company-specific risk be diversified away by investing in both Coherent 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 Coherent and Keysight Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coherent and Keysight Technologies, you can compare the effects of market volatilities on Coherent 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 Coherent with a short position of Keysight Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coherent and Keysight Technologies.
Diversification Opportunities for Coherent and Keysight Technologies
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Coherent and Keysight is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Coherent and Keysight Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keysight Technologies and Coherent 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 Coherent 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 Coherent i.e., Coherent and Keysight Technologies go up and down completely randomly.
Pair Corralation between Coherent and Keysight Technologies
Given the investment horizon of 90 days Coherent is expected to generate 1.08 times less return on investment than Keysight Technologies. In addition to that, Coherent is 1.5 times more volatile than Keysight Technologies. It trades about 0.12 of its total potential returns per unit of risk. Keysight Technologies is currently generating about 0.19 per unit of volatility. If you would invest 15,375 in Keysight Technologies on August 25, 2024 and sell it today you would earn a total of 1,653 from holding Keysight Technologies or generate 10.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coherent vs. Keysight Technologies
Performance |
| Timeline |
| Coherent |
| Keysight Technologies |
Coherent and Keysight Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coherent and Keysight Technologies
The main advantage of trading using opposite Coherent and Keysight Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coherent 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.| Coherent vs. MKS Instruments | Coherent vs. IPG Photonics | Coherent vs. Cognex | Coherent vs. Lumentum Holdings |
| Keysight Technologies vs. Vontier Corp | Keysight Technologies vs. Teledyne Technologies Incorporated | Keysight Technologies vs. ESCO Technologies | Keysight Technologies vs. MKS Instruments |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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