Correlation Between Keyence and Superior Plus
Can any of the company-specific risk be diversified away by investing in both Keyence and Superior Plus 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 Superior Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keyence and Superior Plus Corp, you can compare the effects of market volatilities on Keyence and Superior Plus 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 Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keyence and Superior Plus.
Diversification Opportunities for Keyence and Superior Plus
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Keyence and Superior is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Keyence and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp 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 Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of Keyence i.e., Keyence and Superior Plus go up and down completely randomly.
Pair Corralation between Keyence and Superior Plus
Assuming the 90 days horizon Keyence is expected to generate 2.37 times more return on investment than Superior Plus. However, Keyence is 2.37 times more volatile than Superior Plus Corp. It trades about 0.1 of its potential returns per unit of risk. Superior Plus Corp is currently generating about -0.04 per unit of risk. If you would invest 27,302 in Keyence on September 2, 2024 and sell it today you would earn a total of 13,228 from holding Keyence or generate 48.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keyence vs. Superior Plus Corp
Performance |
| Timeline |
| Keyence |
| Superior Plus Corp |
Keyence and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keyence and Superior Plus
The main advantage of trading using opposite Keyence and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keyence position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.| Keyence vs. Japan Tobacco | Keyence vs. National Retail Properties | Keyence vs. FAST RETAIL ADR | Keyence vs. TRADEGATE |
| Superior Plus vs. TEXAS ROADHOUSE | Superior Plus vs. Broadcom | Superior Plus vs. Fukuyama Transporting Co | Superior Plus vs. Wayside Technology Group |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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