Correlation Between Fluent and KLA Tencor
Can any of the company-specific risk be diversified away by investing in both Fluent and KLA Tencor 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 Fluent and KLA Tencor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fluent Inc and KLA Tencor, you can compare the effects of market volatilities on Fluent and KLA Tencor 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 Fluent with a short position of KLA Tencor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluent and KLA Tencor.
Diversification Opportunities for Fluent and KLA Tencor
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fluent and KLA is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Fluent Inc and KLA Tencor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLA Tencor and Fluent 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 Fluent Inc are associated (or correlated) with KLA Tencor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KLA Tencor has no effect on the direction of Fluent i.e., Fluent and KLA Tencor go up and down completely randomly.
Pair Corralation between Fluent and KLA Tencor
Given the investment horizon of 90 days Fluent is expected to generate 1.57 times less return on investment than KLA Tencor. In addition to that, Fluent is 1.79 times more volatile than KLA Tencor. It trades about 0.01 of its total potential returns per unit of risk. KLA Tencor is currently generating about 0.03 per unit of volatility. If you would invest 58,881 in KLA Tencor on August 28, 2024 and sell it today you would earn a total of 5,586 from holding KLA Tencor or generate 9.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fluent Inc vs. KLA Tencor
Performance |
| Timeline |
| Fluent Inc |
| KLA Tencor |
Fluent and KLA Tencor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fluent and KLA Tencor
The main advantage of trading using opposite Fluent and KLA Tencor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluent position performs unexpectedly, KLA Tencor 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 Tencor will offset losses from the drop in KLA Tencor's long position.| Fluent vs. Marchex | Fluent vs. Dolphin Entertainment | Fluent vs. Beyond Commerce | Fluent vs. MGO Global Common |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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