Correlation Between Global Engine and KLA Tencor
Can any of the company-specific risk be diversified away by investing in both Global Engine 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 Global Engine and KLA Tencor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Engine Group and KLA Tencor, you can compare the effects of market volatilities on Global Engine 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 Global Engine with a short position of KLA Tencor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Engine and KLA Tencor.
Diversification Opportunities for Global Engine and KLA Tencor
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Global and KLA is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Global Engine Group and KLA Tencor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLA Tencor and Global Engine 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 Global Engine Group 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 Global Engine i.e., Global Engine and KLA Tencor go up and down completely randomly.
Pair Corralation between Global Engine and KLA Tencor
Considering the 90-day investment horizon Global Engine Group is expected to generate 4.99 times more return on investment than KLA Tencor. However, Global Engine is 4.99 times more volatile than KLA Tencor. It trades about 0.05 of its potential returns per unit of risk. KLA Tencor is currently generating about -0.22 per unit of risk. If you would invest 386.00 in Global Engine Group on August 30, 2024 and sell it today you would earn a total of 5.00 from holding Global Engine Group or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Global Engine Group vs. KLA Tencor
Performance |
| Timeline |
| Global Engine Group |
| KLA Tencor |
Global Engine and KLA Tencor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Engine and KLA Tencor
The main advantage of trading using opposite Global Engine and KLA Tencor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Engine 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.| Global Engine vs. KLA Tencor | Global Engine vs. Ryman Hospitality Properties | Global Engine vs. MACOM Technology Solutions | Global Engine vs. Advanced Micro Devices |
| KLA Tencor vs. First Solar | KLA Tencor vs. Sunrun Inc | KLA Tencor vs. Canadian Solar | KLA Tencor vs. SolarEdge Technologies |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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