Correlation Between Hewlett Packard and Keysight Technologies

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Can any of the company-specific risk be diversified away by investing in both Hewlett Packard and Keysight Technologies 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 Hewlett Packard and Keysight Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hewlett Packard Enterprise and Keysight Technologies, you can compare the effects of market volatilities on Hewlett Packard and Keysight Technologies 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 Hewlett Packard with a short position of Keysight Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hewlett Packard and Keysight Technologies.

Diversification Opportunities for Hewlett Packard and Keysight Technologies

-0.15
  Correlation Coefficient

Good diversification

The 3 months correlation between Hewlett and Keysight is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Hewlett Packard Enterprise and Keysight Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keysight Technologies and Hewlett Packard 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 Hewlett Packard Enterprise are associated (or correlated) with Keysight Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keysight Technologies has no effect on the direction of Hewlett Packard i.e., Hewlett Packard and Keysight Technologies go up and down completely randomly.

Pair Corralation between Hewlett Packard and Keysight Technologies

Considering the 90-day investment horizon Hewlett Packard is expected to generate 13.31 times less return on investment than Keysight Technologies. In addition to that, Hewlett Packard is 1.16 times more volatile than Keysight Technologies. It trades about 0.01 of its total potential returns per unit of risk. Keysight Technologies is currently generating about 0.17 per unit of volatility. If you would invest  17,054  in Keysight Technologies on September 12, 2025 and sell it today you would earn a total of  4,377  from holding Keysight Technologies or generate 25.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Hewlett Packard Enterprise  vs.  Keysight Technologies

 Performance 
       Timeline  
Hewlett Packard Ente 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days Hewlett Packard Enterprise has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Hewlett Packard is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
Keysight Technologies 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Keysight Technologies are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Keysight Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Hewlett Packard and Keysight Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hewlett Packard and Keysight Technologies

The main advantage of trading using opposite Hewlett Packard and Keysight Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hewlett Packard position performs unexpectedly, Keysight Technologies 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 Keysight Technologies will offset losses from the drop in Keysight Technologies' long position.
The idea behind Hewlett Packard Enterprise and Keysight Technologies 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

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