Correlation Between Hexagon AB and Keyence
Can any of the company-specific risk be diversified away by investing in both Hexagon AB 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 Hexagon AB and Keyence into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hexagon AB and Keyence, you can compare the effects of market volatilities on Hexagon AB 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 Hexagon AB with a short position of Keyence. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hexagon AB and Keyence.
Diversification Opportunities for Hexagon AB and Keyence
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hexagon and Keyence is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Hexagon AB and Keyence in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyence and Hexagon AB 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 Hexagon AB 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 Hexagon AB i.e., Hexagon AB and Keyence go up and down completely randomly.
Pair Corralation between Hexagon AB and Keyence
Assuming the 90 days horizon Hexagon AB is expected to under-perform the Keyence. In addition to that, Hexagon AB is 1.37 times more volatile than Keyence. It trades about -0.02 of its total potential returns per unit of risk. Keyence is currently generating about 0.01 per unit of volatility. If you would invest 40,511 in Keyence on August 25, 2024 and sell it today you would earn a total of 2,124 from holding Keyence or generate 5.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 80.89% |
| Values | Daily Returns |
Hexagon AB vs. Keyence
Performance |
| Timeline |
| Hexagon AB |
| Keyence |
Hexagon AB and Keyence Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hexagon AB and Keyence
The main advantage of trading using opposite Hexagon AB and Keyence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hexagon AB 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.| Hexagon AB vs. Fortive Corp | Hexagon AB vs. Keysight Technologies | Hexagon AB vs. Cognex | Hexagon AB vs. Teledyne Technologies Incorporated |
| 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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