Correlation Between Keyence and Focus Universal
Can any of the company-specific risk be diversified away by investing in both Keyence and Focus Universal 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 Focus Universal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keyence and Focus Universal, you can compare the effects of market volatilities on Keyence and Focus Universal 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 Focus Universal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keyence and Focus Universal.
Diversification Opportunities for Keyence and Focus Universal
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Keyence and Focus is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Keyence and Focus Universal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Universal 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 Focus Universal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Universal has no effect on the direction of Keyence i.e., Keyence and Focus Universal go up and down completely randomly.
Pair Corralation between Keyence and Focus Universal
Assuming the 90 days horizon Keyence is expected to under-perform the Focus Universal. But the pink sheet apears to be less risky and, when comparing its historical volatility, Keyence is 1.83 times less risky than Focus Universal. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Focus Universal is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 26.00 in Focus Universal on August 28, 2024 and sell it today you would lose (1.00) from holding Focus Universal or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keyence vs. Focus Universal
Performance |
| Timeline |
| Keyence |
| Focus Universal |
Keyence and Focus Universal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keyence and Focus Universal
The main advantage of trading using opposite Keyence and Focus Universal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keyence position performs unexpectedly, Focus Universal 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 Focus Universal will offset losses from the drop in Focus Universal's long position.| Keyence vs. Garmin | Keyence vs. Keysight Technologies | Keyence vs. Fortive Corp | Keyence vs. Teledyne Technologies Incorporated |
| Focus Universal vs. ESCO Technologies | Focus Universal vs. Genasys | Focus Universal vs. Cepton Inc | Focus Universal vs. Darkpulse |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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