Correlation Between Keyence and Garmin
Can any of the company-specific risk be diversified away by investing in both Keyence and Garmin 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 Garmin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keyence and Garmin, you can compare the effects of market volatilities on Keyence and Garmin 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 Garmin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keyence and Garmin.
Diversification Opportunities for Keyence and Garmin
Very good diversification
The 3 months correlation between Keyence and Garmin is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Keyence and Garmin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garmin 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 Garmin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garmin has no effect on the direction of Keyence i.e., Keyence and Garmin go up and down completely randomly.
Pair Corralation between Keyence and Garmin
Assuming the 90 days horizon Keyence is expected to under-perform the Garmin. But the pink sheet apears to be less risky and, when comparing its historical volatility, Keyence is 2.39 times less risky than Garmin. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Garmin is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 16,629 in Garmin on August 28, 2024 and sell it today you would earn a total of 4,656 from holding Garmin or generate 28.0% 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. Garmin
Performance |
| Timeline |
| Keyence |
| Garmin |
Keyence and Garmin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keyence and Garmin
The main advantage of trading using opposite Keyence and Garmin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keyence position performs unexpectedly, Garmin 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 Garmin will offset losses from the drop in Garmin's long position.| Keyence vs. Garmin | Keyence vs. Keysight Technologies | Keyence vs. Fortive Corp | Keyence vs. Teledyne Technologies Incorporated |
| Garmin vs. Vontier Corp | Garmin vs. Teledyne Technologies Incorporated | Garmin vs. ESCO Technologies | Garmin 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |