Correlation Between Keyence and Keysight Technologies
Can any of the company-specific risk be diversified away by investing in both Keyence 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 Keyence and Keysight Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keyence and Keysight Technologies, you can compare the effects of market volatilities on Keyence 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 Keyence with a short position of Keysight Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keyence and Keysight Technologies.
Diversification Opportunities for Keyence and Keysight Technologies
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Keyence and Keysight is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Keyence and Keysight Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keysight Technologies and Keyence 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 Keyence 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 Keyence i.e., Keyence and Keysight Technologies go up and down completely randomly.
Pair Corralation between Keyence and Keysight Technologies
Assuming the 90 days horizon Keyence is expected to generate 1.07 times more return on investment than Keysight Technologies. However, Keyence is 1.07 times more volatile than Keysight Technologies. It trades about 0.23 of its potential returns per unit of risk. Keysight Technologies is currently generating about 0.12 per unit of risk. If you would invest 39,530 in Keyence on November 2, 2024 and sell it today you would earn a total of 3,090 from holding Keyence or generate 7.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keyence vs. Keysight Technologies
Performance |
| Timeline |
| Keyence |
| Keysight Technologies |
Keyence and Keysight Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keyence and Keysight Technologies
The main advantage of trading using opposite Keyence and Keysight Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keyence 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.| Keyence vs. Ribbon Communications | Keyence vs. Grupo Carso SAB | Keyence vs. Spirent Communications plc | Keyence vs. Verizon Communications |
| Keysight Technologies vs. ecotel communication ag | Keysight Technologies vs. Zoom Video Communications | Keysight Technologies vs. COFCO Joycome Foods | Keysight Technologies vs. Verizon Communications |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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