Correlation Between Keysight Technologies and Fortive

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

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

Diversification Opportunities for Keysight Technologies and Fortive

0.03

Correlation Coefficient

Keysight Technologies  Fortive

Significant diversification

The 3 months correlation between Keysight and Fortive is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Keysight Technologies and Fortive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortive 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 Fortive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortive has no effect on the direction of Keysight Technologies i.e., Keysight Technologies and Fortive go up and down completely randomly.

Pair Corralation between Keysight Technologies and Fortive

Assuming the 90 days horizon Keysight Technologies is expected to generate 0.57 times more return on investment than Fortive. However, Keysight Technologies is 1.74 times less risky than Fortive. It trades about 0.16 of its potential returns per unit of risk. Fortive is currently generating about -0.08 per unit of risk. If you would invest  11,400  in Keysight Technologies on April 22, 2025 and sell it today you would earn a total of  2,534  from holding Keysight Technologies or generate 22.23% return on investment over 90 days.

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

Keysight Technologies  vs.  Fortive

Keysight Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Keysight Technologies are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Keysight Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Fortive

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fortive has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Keysight Technologies and Fortive

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

The idea behind Keysight Technologies and Fortive 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.