Correlation Between Keysight Technologies and Cognex
Can any of the company-specific risk be diversified away by investing in both Keysight Technologies and Cognex 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 Keysight Technologies and Cognex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keysight Technologies and Cognex, you can compare the effects of market volatilities on Keysight Technologies and Cognex 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 Keysight Technologies with a short position of Cognex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keysight Technologies and Cognex.
Diversification Opportunities for Keysight Technologies and Cognex
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Keysight and Cognex is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Keysight Technologies and Cognex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cognex and Keysight Technologies 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 Keysight Technologies are associated (or correlated) with Cognex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cognex has no effect on the direction of Keysight Technologies i.e., Keysight Technologies and Cognex go up and down completely randomly.
Pair Corralation between Keysight Technologies and Cognex
Given the investment horizon of 90 days Keysight Technologies is expected to generate 0.83 times more return on investment than Cognex. However, Keysight Technologies is 1.2 times less risky than Cognex. It trades about 0.05 of its potential returns per unit of risk. Cognex is currently generating about 0.03 per unit of risk. If you would invest 13,788 in Keysight Technologies on August 25, 2024 and sell it today you would earn a total of 3,240 from holding Keysight Technologies or generate 23.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keysight Technologies vs. Cognex
Performance |
| Timeline |
| Keysight Technologies |
| Cognex |
Keysight Technologies and Cognex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keysight Technologies and Cognex
The main advantage of trading using opposite Keysight Technologies and Cognex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keysight Technologies position performs unexpectedly, Cognex 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 Cognex will offset losses from the drop in Cognex's long position.| Keysight Technologies vs. ESCO Technologies | Keysight Technologies vs. Genasys | Keysight Technologies vs. Cepton Inc | Keysight Technologies vs. Darkpulse |
| Cognex vs. Vontier Corp | Cognex vs. Teledyne Technologies Incorporated | Cognex vs. ESCO Technologies | Cognex 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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