Correlation Between MKS Instruments and Keyence
Can any of the company-specific risk be diversified away by investing in both MKS Instruments and Keyence 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 Keyence into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MKS Instruments and Keyence, you can compare the effects of market volatilities on MKS Instruments and Keyence 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 Keyence. Check out your portfolio center. Please also check ongoing floating volatility patterns of MKS Instruments and Keyence.
Diversification Opportunities for MKS Instruments and Keyence
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between MKS and Keyence is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding MKS Instruments and Keyence in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyence 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 Keyence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keyence has no effect on the direction of MKS Instruments i.e., MKS Instruments and Keyence go up and down completely randomly.
Pair Corralation between MKS Instruments and Keyence
Assuming the 90 days horizon MKS Instruments is expected to generate 4.08 times less return on investment than Keyence. But when comparing it to its historical volatility, MKS Instruments is 1.77 times less risky than Keyence. It trades about 0.03 of its potential returns per unit of risk. Keyence is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 17,627 in Keyence on September 12, 2024 and sell it today you would earn a total of 23,083 from holding Keyence or generate 130.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MKS Instruments vs. Keyence
Performance |
| Timeline |
| MKS Instruments |
| Keyence |
MKS Instruments and Keyence Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MKS Instruments and Keyence
The main advantage of trading using opposite MKS Instruments and Keyence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MKS Instruments position performs unexpectedly, Keyence 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 Keyence will offset losses from the drop in Keyence's long position.| MKS Instruments vs. HEXAGON AB ADR1 | MKS Instruments vs. Superior Plus Corp | MKS Instruments vs. SIVERS SEMICONDUCTORS AB | MKS Instruments vs. NorAm Drilling AS |
| Keyence vs. HEXAGON AB ADR1 | Keyence vs. Superior Plus Corp | Keyence vs. SIVERS SEMICONDUCTORS AB | Keyence vs. NorAm Drilling AS |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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