Correlation Between Keysight Technologies and Energous

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

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

Diversification Opportunities for Keysight Technologies and Energous

-0.6

Correlation Coefficient

Keysight Technologies  Energous

Excellent diversification

The 3 months correlation between Keysight and Energous is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Keysight Technologies and Energous in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energous 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 Energous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energous has no effect on the direction of Keysight Technologies i.e., Keysight Technologies and Energous go up and down completely randomly.

Pair Corralation between Keysight Technologies and Energous

Given the investment horizon of 90 days Keysight Technologies is expected to generate 0.38 times more return on investment than Energous. However, Keysight Technologies is 2.67 times less risky than Energous. It trades about -0.16 of its potential returns per unit of risk. Energous is currently generating about -0.56 per unit of risk. If you would invest  17,168  in Keysight Technologies on September 24, 2024 and sell it today you would lose (897.00) from holding Keysight Technologies or give up 5.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Keysight Technologies  vs.  Energous

Keysight Technologies

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Keysight Technologies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Keysight Technologies is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Energous

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Energous has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Keysight Technologies and Energous

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

The idea behind Keysight Technologies and Energous 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.