Correlation Between Cepton and Keysight Technologies
Can any of the company-specific risk be diversified away by investing in both Cepton 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 Cepton and Keysight Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cepton Inc and Keysight Technologies, you can compare the effects of market volatilities on Cepton 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 Cepton with a short position of Keysight Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cepton and Keysight Technologies.
Diversification Opportunities for Cepton and Keysight Technologies
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cepton and Keysight is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Cepton Inc and Keysight Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keysight Technologies and Cepton 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 Cepton Inc 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 Cepton i.e., Cepton and Keysight Technologies go up and down completely randomly.
Pair Corralation between Cepton and Keysight Technologies
Assuming the 90 days horizon Cepton Inc is expected to generate 8.79 times more return on investment than Keysight Technologies. However, Cepton is 8.79 times more volatile than Keysight Technologies. It trades about 0.05 of its potential returns per unit of risk. Keysight Technologies is currently generating about 0.03 per unit of risk. If you would invest 3.21 in Cepton Inc on August 29, 2024 and sell it today you would lose (2.47) from holding Cepton Inc or give up 76.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 81.68% |
| Values | Daily Returns |
Cepton Inc vs. Keysight Technologies
Performance |
| Timeline |
| Cepton Inc |
| Keysight Technologies |
Cepton and Keysight Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cepton and Keysight Technologies
The main advantage of trading using opposite Cepton and Keysight Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cepton 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.| Cepton vs. Cepton Inc | Cepton vs. Thayer Ventures Acquisition | Cepton vs. Anghami Warrants | Cepton vs. Inspirato |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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