Correlation Between KLA and ASML HOLDING
Can any of the company-specific risk be diversified away by investing in both KLA and ASML HOLDING 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 KLA and ASML HOLDING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KLA Corporation and ASML HOLDING NY, you can compare the effects of market volatilities on KLA and ASML HOLDING 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 KLA with a short position of ASML HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of KLA and ASML HOLDING.
Diversification Opportunities for KLA and ASML HOLDING
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between KLA and ASML is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding KLA Corp. and ASML HOLDING NY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASML HOLDING NY and KLA 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 KLA Corporation are associated (or correlated) with ASML HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASML HOLDING NY has no effect on the direction of KLA i.e., KLA and ASML HOLDING go up and down completely randomly.
Pair Corralation between KLA and ASML HOLDING
Assuming the 90 days horizon KLA Corporation is expected to under-perform the ASML HOLDING. In addition to that, KLA is 1.1 times more volatile than ASML HOLDING NY. It trades about -0.14 of its total potential returns per unit of risk. ASML HOLDING NY is currently generating about -0.11 per unit of volatility. If you would invest 66,234 in ASML HOLDING NY on August 25, 2024 and sell it today you would lose (2,834) from holding ASML HOLDING NY or give up 4.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KLA Corp. vs. ASML HOLDING NY
Performance |
| Timeline |
| KLA Corporation |
| ASML HOLDING NY |
KLA and ASML HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KLA and ASML HOLDING
The main advantage of trading using opposite KLA and ASML HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KLA position performs unexpectedly, ASML HOLDING 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 ASML HOLDING will offset losses from the drop in ASML HOLDING's long position.The idea behind KLA Corporation and ASML HOLDING NY 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.| ASML HOLDING vs. TROPHY GAMES DEV | ASML HOLDING vs. GigaMedia | ASML HOLDING vs. HOCHSCHILD MINING | ASML HOLDING vs. Games Workshop Group |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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