Correlation Between OAKRIDGE INTERNATIONAL and Keysight Technologies
Can any of the company-specific risk be diversified away by investing in both OAKRIDGE INTERNATIONAL and Keysight Technologies 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 OAKRIDGE INTERNATIONAL and Keysight Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OAKRIDGE INTERNATIONAL and Keysight Technologies, you can compare the effects of market volatilities on OAKRIDGE INTERNATIONAL and Keysight Technologies 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 OAKRIDGE INTERNATIONAL with a short position of Keysight Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of OAKRIDGE INTERNATIONAL and Keysight Technologies.
Diversification Opportunities for OAKRIDGE INTERNATIONAL and Keysight Technologies
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OAKRIDGE and Keysight is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding OAKRIDGE INTERNATIONAL and Keysight Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keysight Technologies and OAKRIDGE INTERNATIONAL 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 OAKRIDGE INTERNATIONAL are associated (or correlated) with Keysight Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keysight Technologies has no effect on the direction of OAKRIDGE INTERNATIONAL i.e., OAKRIDGE INTERNATIONAL and Keysight Technologies go up and down completely randomly.
Pair Corralation between OAKRIDGE INTERNATIONAL and Keysight Technologies
Assuming the 90 days trading horizon OAKRIDGE INTERNATIONAL is expected to generate 4.24 times more return on investment than Keysight Technologies. However, OAKRIDGE INTERNATIONAL is 4.24 times more volatile than Keysight Technologies. It trades about 0.14 of its potential returns per unit of risk. Keysight Technologies is currently generating about 0.3 per unit of risk. If you would invest 2.50 in OAKRIDGE INTERNATIONAL on September 2, 2024 and sell it today you would earn a total of 0.60 from holding OAKRIDGE INTERNATIONAL or generate 24.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OAKRIDGE INTERNATIONAL vs. Keysight Technologies
Performance |
| Timeline |
| OAKRIDGE INTERNATIONAL |
| Keysight Technologies |
OAKRIDGE INTERNATIONAL and Keysight Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OAKRIDGE INTERNATIONAL and Keysight Technologies
The main advantage of trading using opposite OAKRIDGE INTERNATIONAL and Keysight Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OAKRIDGE INTERNATIONAL position performs unexpectedly, Keysight Technologies 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 Keysight Technologies will offset losses from the drop in Keysight Technologies' long position.| OAKRIDGE INTERNATIONAL vs. Superior Plus Corp | OAKRIDGE INTERNATIONAL vs. NMI Holdings | OAKRIDGE INTERNATIONAL vs. Origin Agritech | OAKRIDGE INTERNATIONAL vs. SIVERS SEMICONDUCTORS AB |
| Keysight Technologies vs. Superior Plus Corp | Keysight Technologies vs. NMI Holdings | Keysight Technologies vs. Origin Agritech | Keysight Technologies vs. SIVERS SEMICONDUCTORS AB |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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