Correlation Between Keysight Technologies and Nanalysis Scientific

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

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

Diversification Opportunities for Keysight Technologies and Nanalysis Scientific

-0.65

Correlation Coefficient

Keysight Technologies  Nanalysis Scientific

Excellent diversification

The 3 months correlation between Keysight and Nanalysis is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Keysight Technologies and Nanalysis Scientific Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanalysis Scientific Corp and Keysight Technologies 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 Keysight Technologies are associated (or correlated) with Nanalysis Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanalysis Scientific Corp has no effect on the direction of Keysight Technologies i.e., Keysight Technologies and Nanalysis Scientific go up and down completely randomly.

Pair Corralation between Keysight Technologies and Nanalysis Scientific

Given the investment horizon of 90 days Keysight Technologies is expected to generate 0.36 times more return on investment than Nanalysis Scientific. However, Keysight Technologies is 2.8 times less risky than Nanalysis Scientific. It trades about 0.11 of its potential returns per unit of risk. Nanalysis Scientific Corp is currently generating about -0.03 per unit of risk. If you would invest  15,004  in Keysight Technologies on September 13, 2024 and sell it today you would earn a total of  1,848  from holding Keysight Technologies or generate 12.32% return on investment over 90 days.

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

Keysight Technologies  vs.  Nanalysis Scientific Corp

Keysight Technologies

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Keysight Technologies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Keysight Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Nanalysis Scientific Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nanalysis Scientific Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's forward indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Keysight Technologies and Nanalysis Scientific

The main advantage of trading using opposite Keysight Technologies and Nanalysis Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keysight Technologies position performs unexpectedly, Nanalysis Scientific 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 Nanalysis Scientific will offset losses from the drop in Nanalysis Scientific's long position.

The idea behind Keysight Technologies and Nanalysis Scientific Corp 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.