Correlation Between Fortive Corp and Keyence
Can any of the company-specific risk be diversified away by investing in both Fortive Corp 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 Fortive Corp and Keyence into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortive Corp and Keyence, you can compare the effects of market volatilities on Fortive Corp 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 Fortive Corp with a short position of Keyence. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortive Corp and Keyence.
Diversification Opportunities for Fortive Corp and Keyence
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fortive and Keyence is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Fortive Corp and Keyence in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyence and Fortive Corp 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 Fortive Corp 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 Fortive Corp i.e., Fortive Corp and Keyence go up and down completely randomly.
Pair Corralation between Fortive Corp and Keyence
Considering the 90-day investment horizon Fortive Corp is expected to generate 2.07 times less return on investment than Keyence. But when comparing it to its historical volatility, Fortive Corp is 1.41 times less risky than Keyence. It trades about 0.02 of its potential returns per unit of risk. Keyence is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 37,039 in Keyence on August 25, 2024 and sell it today you would earn a total of 5,596 from holding Keyence or generate 15.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortive Corp vs. Keyence
Performance |
| Timeline |
| Fortive Corp |
| Keyence |
Fortive Corp and Keyence Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortive Corp and Keyence
The main advantage of trading using opposite Fortive Corp and Keyence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortive Corp 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.| Fortive Corp vs. Vishay Precision Group | Fortive Corp vs. Sensata Technologies Holding | Fortive Corp vs. Badger Meter | Fortive Corp vs. Trimble |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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