Correlation Between Keyence and Shimadzu
Can any of the company-specific risk be diversified away by investing in both Keyence and Shimadzu 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 Shimadzu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keyence and Shimadzu, you can compare the effects of market volatilities on Keyence and Shimadzu 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 Shimadzu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keyence and Shimadzu.
Diversification Opportunities for Keyence and Shimadzu
Very good diversification
The 3 months correlation between Keyence and Shimadzu is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Keyence and Shimadzu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shimadzu 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 Shimadzu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shimadzu has no effect on the direction of Keyence i.e., Keyence and Shimadzu go up and down completely randomly.
Pair Corralation between Keyence and Shimadzu
Assuming the 90 days horizon Keyence is expected to generate 2.64 times more return on investment than Shimadzu. However, Keyence is 2.64 times more volatile than Shimadzu. It trades about 0.0 of its potential returns per unit of risk. Shimadzu is currently generating about -0.08 per unit of risk. If you would invest 44,591 in Keyence on September 3, 2024 and sell it today you would lose (1,991) from holding Keyence or give up 4.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Keyence vs. Shimadzu
Performance |
| Timeline |
| Keyence |
| Shimadzu |
Keyence and Shimadzu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keyence and Shimadzu
The main advantage of trading using opposite Keyence and Shimadzu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keyence position performs unexpectedly, Shimadzu 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 Shimadzu will offset losses from the drop in Shimadzu's long position.| Keyence vs. Fortive Corp | Keyence vs. MKS Instruments | Keyence vs. Novanta | Keyence vs. Sensata Technologies Holding |
| Shimadzu vs. Itron Inc | Shimadzu vs. Sensata Technologies Holding | Shimadzu vs. FARO Technologies | Shimadzu vs. Teledyne Technologies Incorporated |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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