Correlation Between Coherent and Keyence
Can any of the company-specific risk be diversified away by investing in both Coherent and Keyence 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 Keyence into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coherent and Keyence, you can compare the effects of market volatilities on Coherent and Keyence 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 Keyence. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coherent and Keyence.
Diversification Opportunities for Coherent and Keyence
Very good diversification
The 3 months correlation between Coherent and Keyence is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Coherent and Keyence in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyence 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 Keyence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keyence has no effect on the direction of Coherent i.e., Coherent and Keyence go up and down completely randomly.
Pair Corralation between Coherent and Keyence
Given the investment horizon of 90 days Coherent is expected to generate 1.69 times more return on investment than Keyence. However, Coherent is 1.69 times more volatile than Keyence. It trades about 0.14 of its potential returns per unit of risk. Keyence is currently generating about 0.03 per unit of risk. If you would invest 3,233 in Coherent on August 25, 2024 and sell it today you would earn a total of 7,301 from holding Coherent or generate 225.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coherent vs. Keyence
Performance |
| Timeline |
| Coherent |
| Keyence |
Coherent and Keyence Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coherent and Keyence
The main advantage of trading using opposite Coherent and Keyence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coherent position performs unexpectedly, Keyence 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 Keyence will offset losses from the drop in Keyence's long position.| Coherent vs. MKS Instruments | Coherent vs. IPG Photonics | Coherent vs. Cognex | Coherent vs. Lumentum Holdings |
| Keyence vs. Fortive Corp | Keyence vs. MKS Instruments | Keyence vs. Novanta | Keyence vs. Sensata Technologies Holding |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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