Correlation Between Global Warming and Keysight Technologies

Can any of the company-specific risk be diversified away by investing in both Global Warming 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 Global Warming and Keysight Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global Warming Solut and Keysight Technologies, you can compare the effects of market volatilities on Global Warming 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 Global Warming with a short position of Keysight Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Warming and Keysight Technologies.

Diversification Opportunities for Global Warming and Keysight Technologies

-0.26

Correlation Coefficient

Global Warming  Keysight Technologies

Very good diversification

The 3 months correlation between Global and Keysight is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Global Warming Solut and Keysight Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keysight Technologies and Global Warming 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 Global Warming Solut 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 Global Warming i.e., Global Warming and Keysight Technologies go up and down completely randomly.

Pair Corralation between Global Warming and Keysight Technologies

Given the investment horizon of 90 days Global Warming Solut is expected to generate 15.25 times more return on investment than Keysight Technologies. However, Global Warming is 15.25 times more volatile than Keysight Technologies. It trades about 0.1 of its potential returns per unit of risk. Keysight Technologies is currently generating about 0.05 per unit of risk. If you would invest  31.00  in Global Warming Solut on December 5, 2024 and sell it today you would earn a total of  68.00  from holding Global Warming Solut or generate 219.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Global Warming Solut  vs.  Keysight Technologies

Global Warming Solut

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global Warming Solut has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Keysight Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Keysight Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Global Warming and Keysight Technologies

The main advantage of trading using opposite Global Warming and Keysight Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Warming 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.

The idea behind Global Warming Solut and Keysight Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.