Correlation Between Grocery Outlet and KLA Tencor
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet 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 Grocery Outlet and KLA Tencor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grocery Outlet Holding and KLA Tencor, you can compare the effects of market volatilities on Grocery Outlet 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 Grocery Outlet with a short position of KLA Tencor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and KLA Tencor.
Diversification Opportunities for Grocery Outlet and KLA Tencor
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grocery and KLA is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding and KLA Tencor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLA Tencor and Grocery Outlet 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 Grocery Outlet Holding 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 Grocery Outlet i.e., Grocery Outlet and KLA Tencor go up and down completely randomly.
Pair Corralation between Grocery Outlet and KLA Tencor
Allowing for the 90-day total investment horizon Grocery Outlet is expected to generate 8.57 times less return on investment than KLA Tencor. In addition to that, Grocery Outlet is 1.33 times more volatile than KLA Tencor. It trades about 0.05 of its total potential returns per unit of risk. KLA Tencor is currently generating about 0.51 per unit of volatility. If you would invest 64,799 in KLA Tencor on October 23, 2024 and sell it today you would earn a total of 11,925 from holding KLA Tencor or generate 18.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grocery Outlet Holding vs. KLA Tencor
Performance |
| Timeline |
| Grocery Outlet Holding |
| KLA Tencor |
Grocery Outlet and KLA Tencor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grocery Outlet and KLA Tencor
The main advantage of trading using opposite Grocery Outlet and KLA Tencor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet 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.| Grocery Outlet vs. Natural Grocers by | Grocery Outlet vs. Village Super Market | Grocery Outlet vs. Ingles Markets Incorporated | Grocery Outlet vs. Ocado Group plc |
| KLA Tencor vs. Applied Materials | KLA Tencor vs. ASML Holding NV | KLA Tencor vs. Axcelis Technologies | KLA Tencor vs. Teradyne |
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 Stocks Directory module to find actively traded stocks across global markets.
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