Correlation Between Keysight Technologies and Fortive Corp
Can any of the company-specific risk be diversified away by investing in both Keysight Technologies and Fortive Corp 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 Fortive Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keysight Technologies and Fortive Corp, you can compare the effects of market volatilities on Keysight Technologies and Fortive Corp 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 Fortive Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keysight Technologies and Fortive Corp.
Diversification Opportunities for Keysight Technologies and Fortive Corp
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Keysight and Fortive is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Keysight Technologies and Fortive Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortive Corp 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 Fortive Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortive Corp has no effect on the direction of Keysight Technologies i.e., Keysight Technologies and Fortive Corp go up and down completely randomly.
Pair Corralation between Keysight Technologies and Fortive Corp
Given the investment horizon of 90 days Keysight Technologies is expected to generate 1.68 times more return on investment than Fortive Corp. However, Keysight Technologies is 1.68 times more volatile than Fortive Corp. It trades about 0.18 of its potential returns per unit of risk. Fortive Corp is currently generating about 0.15 per unit of risk. If you would invest 15,573 in Keysight Technologies on August 28, 2024 and sell it today you would earn a total of 1,618 from holding Keysight Technologies or generate 10.39% 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. Fortive Corp
Performance |
| Timeline |
| Keysight Technologies |
| Fortive Corp |
Keysight Technologies and Fortive Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keysight Technologies and Fortive Corp
The main advantage of trading using opposite Keysight Technologies and Fortive Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keysight Technologies position performs unexpectedly, Fortive Corp 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 Fortive Corp will offset losses from the drop in Fortive Corp's long position.| Keysight Technologies vs. Vontier Corp | Keysight Technologies vs. Teledyne Technologies Incorporated | Keysight Technologies vs. ESCO Technologies | Keysight Technologies vs. MKS Instruments |
| Fortive Corp vs. Novanta | Fortive Corp vs. Sono Tek Corp | Fortive Corp vs. Itron Inc | Fortive Corp vs. Badger Meter |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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