Correlation Between ASM International and KLA
Can any of the company-specific risk be diversified away by investing in both ASM International and KLA 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 ASM International and KLA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASM International NV and KLA Corporation, you can compare the effects of market volatilities on ASM International and KLA 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 ASM International with a short position of KLA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASM International and KLA.
Diversification Opportunities for ASM International and KLA
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ASM and KLA is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding ASM International NV and KLA Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLA Corporation and ASM International 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 ASM International NV are associated (or correlated) with KLA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KLA Corporation has no effect on the direction of ASM International i.e., ASM International and KLA go up and down completely randomly.
Pair Corralation between ASM International and KLA
Assuming the 90 days horizon ASM International NV is expected to generate 0.91 times more return on investment than KLA. However, ASM International NV is 1.1 times less risky than KLA. It trades about -0.06 of its potential returns per unit of risk. KLA Corporation is currently generating about -0.06 per unit of risk. If you would invest 59,020 in ASM International NV on August 28, 2024 and sell it today you would lose (7,940) from holding ASM International NV or give up 13.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASM International NV vs. KLA Corp.
Performance |
| Timeline |
| ASM International |
| KLA Corporation |
ASM International and KLA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASM International and KLA
The main advantage of trading using opposite ASM International and KLA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASM International position performs unexpectedly, KLA 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 KLA will offset losses from the drop in KLA's long position.| ASM International vs. ASML HOLDING NY | ASM International vs. Applied Materials | ASM International vs. Superior Plus Corp | ASM International vs. NMI Holdings |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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