Correlation Between Cognex and Keyence

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

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

Diversification Opportunities for Cognex and Keyence

-0.35

Correlation Coefficient

Cognex  Keyence

Very good diversification

The 3 months correlation between Cognex and Keyence is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Cognex and Keyence in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyence and Cognex 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 Cognex 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 Cognex i.e., Cognex and Keyence go up and down completely randomly.

Pair Corralation between Cognex and Keyence

Assuming the 90 days horizon Cognex is expected to generate 1.37 times more return on investment than Keyence. However, Cognex is 1.37 times more volatile than Keyence. It trades about 0.21 of its potential returns per unit of risk. Keyence is currently generating about -0.12 per unit of risk. If you would invest  2,187  in Cognex on April 24, 2025 and sell it today you would earn a total of  691.00  from holding Cognex or generate 31.6% return on investment over 90 days.

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

Cognex  vs.  Keyence

Cognex

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cognex are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Cognex 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 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 Cognex and Keyence

The main advantage of trading using opposite Cognex and Keyence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cognex 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 Cognex 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.

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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.