Correlation Between Keyence and US Nuclear
Can any of the company-specific risk be diversified away by investing in both Keyence and US Nuclear 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 Keyence and US Nuclear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keyence and US Nuclear Corp, you can compare the effects of market volatilities on Keyence and US Nuclear 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 Keyence with a short position of US Nuclear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keyence and US Nuclear.
Diversification Opportunities for Keyence and US Nuclear
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Keyence and UCLE is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Keyence and US Nuclear Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Nuclear Corp and Keyence 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 Keyence are associated (or correlated) with US Nuclear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Nuclear Corp has no effect on the direction of Keyence i.e., Keyence and US Nuclear go up and down completely randomly.
Pair Corralation between Keyence and US Nuclear
Assuming the 90 days horizon Keyence is expected to generate 0.37 times more return on investment than US Nuclear. However, Keyence is 2.72 times less risky than US Nuclear. It trades about 0.08 of its potential returns per unit of risk. US Nuclear Corp is currently generating about -0.12 per unit of risk. If you would invest 39,500 in Keyence on December 6, 2024 and sell it today you would earn a total of 1,450 from holding Keyence or generate 3.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Keyence vs. US Nuclear Corp
Performance |
Timeline |
Keyence |
US Nuclear Corp |
Keyence and US Nuclear Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Keyence and US Nuclear
The main advantage of trading using opposite Keyence and US Nuclear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keyence position performs unexpectedly, US Nuclear 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 US Nuclear will offset losses from the drop in US Nuclear's long position.Keyence vs. Fortive Corp | Keyence vs. MKS Instruments | Keyence vs. Novanta | Keyence vs. Sensata Technologies Holding |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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