Correlation Between Keyence and Signal Advance
Can any of the company-specific risk be diversified away by investing in both Keyence and Signal Advance 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 Signal Advance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keyence and Signal Advance, you can compare the effects of market volatilities on Keyence and Signal Advance 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 Signal Advance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keyence and Signal Advance.
Diversification Opportunities for Keyence and Signal Advance
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Keyence and Signal is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Keyence and Signal Advance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Signal Advance 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 Signal Advance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Signal Advance has no effect on the direction of Keyence i.e., Keyence and Signal Advance go up and down completely randomly.
Pair Corralation between Keyence and Signal Advance
Assuming the 90 days horizon Keyence is expected to generate 11.81 times less return on investment than Signal Advance. But when comparing it to its historical volatility, Keyence is 5.44 times less risky than Signal Advance. It trades about 0.01 of its potential returns per unit of risk. Signal Advance is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 31.00 in Signal Advance on December 24, 2024 and sell it today you would lose (4.00) from holding Signal Advance or give up 12.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keyence vs. Signal Advance
Performance |
| Timeline |
| Keyence |
| Signal Advance |
Keyence and Signal Advance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keyence and Signal Advance
The main advantage of trading using opposite Keyence and Signal Advance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keyence position performs unexpectedly, Signal Advance 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 Signal Advance will offset losses from the drop in Signal Advance's long position.| Keyence vs. Fortive Corp | Keyence vs. MKS Instruments | Keyence vs. Novanta | Keyence vs. Sensata Technologies Holding |
| Signal Advance vs. Mind Technology | Signal Advance vs. Wrap Technologies | Signal Advance vs. Microvision | Signal Advance 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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