Correlation Between Keysight Technologies and SERI INDUSTRIAL

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

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

Diversification Opportunities for Keysight Technologies and SERI INDUSTRIAL

0.11

Correlation Coefficient

Keysight Technologies  SERI INDUSTRIAL

Average diversification

The 3 months correlation between Keysight and SERI is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Keysight Technologies and SERI INDUSTRIAL EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SERI INDUSTRIAL EO 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 SERI INDUSTRIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SERI INDUSTRIAL EO has no effect on the direction of Keysight Technologies i.e., Keysight Technologies and SERI INDUSTRIAL go up and down completely randomly.

Pair Corralation between Keysight Technologies and SERI INDUSTRIAL

Assuming the 90 days horizon Keysight Technologies is expected to generate 0.46 times more return on investment than SERI INDUSTRIAL. However, Keysight Technologies is 2.17 times less risky than SERI INDUSTRIAL. It trades about 0.13 of its potential returns per unit of risk. SERI INDUSTRIAL EO is currently generating about 0.05 per unit of risk. If you would invest  12,118  in Keysight Technologies on April 23, 2025 and sell it today you would earn a total of  1,816  from holding Keysight Technologies or generate 14.99% 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.  SERI INDUSTRIAL EO

Keysight Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Keysight Technologies are ranked lower than 9 (%) 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.

SERI INDUSTRIAL EO

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SERI INDUSTRIAL EO are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, SERI INDUSTRIAL reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Keysight Technologies and SERI INDUSTRIAL

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

The idea behind Keysight Technologies and SERI INDUSTRIAL EO 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..