Correlation Between MKS Instruments and Coherent
Can any of the company-specific risk be diversified away by investing in both MKS Instruments 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 MKS Instruments and Coherent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MKS Instruments and Coherent, you can compare the effects of market volatilities on MKS Instruments 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 MKS Instruments with a short position of Coherent. Check out your portfolio center. Please also check ongoing floating volatility patterns of MKS Instruments and Coherent.
Diversification Opportunities for MKS Instruments and Coherent
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MKS and Coherent is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding MKS Instruments and Coherent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coherent and MKS Instruments 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 MKS Instruments 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 MKS Instruments i.e., MKS Instruments and Coherent go up and down completely randomly.
Pair Corralation between MKS Instruments and Coherent
Given the investment horizon of 90 days MKS Instruments is expected to generate 3.28 times less return on investment than Coherent. But when comparing it to its historical volatility, MKS Instruments is 1.42 times less risky than Coherent. It trades about 0.03 of its potential returns per unit of risk. Coherent is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,291 in Coherent on November 2, 2024 and sell it today you would earn a total of 4,841 from holding Coherent or generate 112.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
MKS Instruments vs. Coherent
Performance |
| Timeline |
| MKS Instruments |
| Coherent |
MKS Instruments and Coherent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MKS Instruments and Coherent
The main advantage of trading using opposite MKS Instruments and Coherent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MKS Instruments 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.| MKS Instruments vs. Vontier Corp | MKS Instruments vs. Teledyne Technologies Incorporated | MKS Instruments vs. ESCO Technologies | MKS Instruments 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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