Correlation Between Keyence and Coherent
Can any of the company-specific risk be diversified away by investing in both Keyence and Coherent 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 Coherent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keyence and Coherent, you can compare the effects of market volatilities on Keyence and Coherent 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 Coherent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keyence and Coherent.
Diversification Opportunities for Keyence and Coherent
Very good diversification
The 3 months correlation between Keyence and Coherent is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Keyence and Coherent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coherent 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 Coherent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coherent has no effect on the direction of Keyence i.e., Keyence and Coherent go up and down completely randomly.
Pair Corralation between Keyence and Coherent
Assuming the 90 days horizon Keyence is expected to generate 7.76 times less return on investment than Coherent. But when comparing it to its historical volatility, Keyence is 1.69 times less risky than Coherent. It trades about 0.03 of its potential returns per unit of risk. Coherent is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 9,671 in Coherent on August 25, 2024 and sell it today you would earn a total of 863.00 from holding Coherent or generate 8.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keyence vs. Coherent
Performance |
| Timeline |
| Keyence |
| Coherent |
Keyence and Coherent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keyence and Coherent
The main advantage of trading using opposite Keyence and Coherent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keyence position performs unexpectedly, Coherent 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 Coherent will offset losses from the drop in Coherent's long position.| Keyence vs. Fortive Corp | Keyence vs. MKS Instruments | Keyence vs. Novanta | Keyence vs. Sensata Technologies Holding |
| Coherent vs. MKS Instruments | Coherent vs. IPG Photonics | Coherent vs. Cognex | Coherent vs. Lumentum Holdings |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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