Correlation Between Tokyu REIT and Keyence
Can any of the company-specific risk be diversified away by investing in both Tokyu REIT 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 Tokyu REIT and Keyence into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tokyu REIT and Keyence, you can compare the effects of market volatilities on Tokyu REIT 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 Tokyu REIT with a short position of Keyence. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tokyu REIT and Keyence.
Diversification Opportunities for Tokyu REIT and Keyence
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tokyu and Keyence is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Tokyu REIT and Keyence in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyence and Tokyu REIT 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 Tokyu REIT 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 Tokyu REIT i.e., Tokyu REIT and Keyence go up and down completely randomly.
Pair Corralation between Tokyu REIT and Keyence
Assuming the 90 days horizon Tokyu REIT is expected to under-perform the Keyence. In addition to that, Tokyu REIT is 8.94 times more volatile than Keyence. It trades about -0.11 of its total potential returns per unit of risk. Keyence is currently generating about 0.01 per unit of volatility. If you would invest 40,511 in Keyence on August 25, 2024 and sell it today you would earn a total of 2,124 from holding Keyence or generate 5.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 15.9% |
| Values | Daily Returns |
Tokyu REIT vs. Keyence
Performance |
| Timeline |
| Tokyu REIT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Keyence |
Tokyu REIT and Keyence Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tokyu REIT and Keyence
The main advantage of trading using opposite Tokyu REIT and Keyence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tokyu REIT 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.| Tokyu REIT vs. Pure Cycle | Tokyu REIT vs. Empresa Distribuidora y | Tokyu REIT vs. Nok Airlines Public | Tokyu REIT vs. Atmos Energy |
| Keyence vs. Fortive Corp | Keyence vs. MKS Instruments | Keyence vs. Novanta | Keyence vs. Sensata Technologies Holding |
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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