Correlation Between MACOM Technology and Keyence

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

By analyzing existing cross correlation between MACOM Technology Solutions and Keyence, you can compare the effects of market volatilities on MACOM Technology and Keyence 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 MACOM Technology with a short position of Keyence. Check out your portfolio center. Please also check ongoing floating volatility patterns of MACOM Technology and Keyence.

Diversification Opportunities for MACOM Technology and Keyence

-0.55

Correlation Coefficient

MACOM Technology  Keyence

Excellent diversification

The 3 months correlation between MACOM and Keyence is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding MACOM Technology Solutions and Keyence in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyence and MACOM Technology 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 MACOM Technology Solutions are associated (or correlated) with Keyence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keyence has no effect on the direction of MACOM Technology i.e., MACOM Technology and Keyence go up and down completely randomly.

Pair Corralation between MACOM Technology and Keyence

Assuming the 90 days horizon MACOM Technology Solutions is expected to generate 1.32 times more return on investment than Keyence. However, MACOM Technology is 1.32 times more volatile than Keyence. It trades about 0.25 of its potential returns per unit of risk. Keyence is currently generating about -0.11 per unit of risk. If you would invest  8,900  in MACOM Technology Solutions on April 23, 2025 and sell it today you would earn a total of  3,300  from holding MACOM Technology Solutions or generate 37.08% return on investment over 90 days.

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

MACOM Technology Solutions  vs.  Keyence

MACOM Technology Sol

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MACOM Technology Solutions are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, MACOM Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Keyence

Risk-Adjusted Performance

Very Weak

Over the last 90 days Keyence has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic 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 MACOM Technology and Keyence

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

The idea behind MACOM Technology Solutions and Keyence 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.