Correlation Between MKS Instruments and Keysight Technologies
Can any of the company-specific risk be diversified away by investing in both MKS Instruments 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 MKS Instruments and Keysight Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MKS Instruments and Keysight Technologies, you can compare the effects of market volatilities on MKS Instruments 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 MKS Instruments with a short position of Keysight Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of MKS Instruments and Keysight Technologies.
Diversification Opportunities for MKS Instruments and Keysight Technologies
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MKS and Keysight is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding MKS Instruments and Keysight Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keysight Technologies 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 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 MKS Instruments i.e., MKS Instruments and Keysight Technologies go up and down completely randomly.
Pair Corralation between MKS Instruments and Keysight Technologies
Given the investment horizon of 90 days MKS Instruments is expected to under-perform the Keysight Technologies. But the stock apears to be less risky and, when comparing its historical volatility, MKS Instruments is 1.01 times less risky than Keysight Technologies. The stock trades about 0.0 of its potential returns per unit of risk. The Keysight Technologies is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 16,518 in Keysight Technologies on September 8, 2024 and sell it today you would earn a total of 655.00 from holding Keysight Technologies or generate 3.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
MKS Instruments vs. Keysight Technologies
Performance |
Timeline |
MKS Instruments |
Keysight Technologies |
MKS Instruments and Keysight Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MKS Instruments and Keysight Technologies
The main advantage of trading using opposite MKS Instruments and Keysight Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MKS Instruments 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.MKS Instruments vs. Vontier Corp | MKS Instruments vs. Teledyne Technologies Incorporated | MKS Instruments vs. ESCO Technologies | MKS Instruments vs. Sensata Technologies Holding |
Keysight Technologies vs. Vontier Corp | Keysight Technologies vs. Teledyne Technologies Incorporated | Keysight Technologies vs. ESCO Technologies | Keysight Technologies vs. MKS Instruments |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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