Correlation Between KLA Tencor and Grupo Aeroportuario
Can any of the company-specific risk be diversified away by investing in both KLA Tencor and Grupo Aeroportuario 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 Tencor and Grupo Aeroportuario into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KLA Tencor and Grupo Aeroportuario del, you can compare the effects of market volatilities on KLA Tencor and Grupo Aeroportuario 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 Tencor with a short position of Grupo Aeroportuario. Check out your portfolio center. Please also check ongoing floating volatility patterns of KLA Tencor and Grupo Aeroportuario.
Diversification Opportunities for KLA Tencor and Grupo Aeroportuario
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KLA and Grupo is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding KLA Tencor and Grupo Aeroportuario del in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Aeroportuario del and KLA Tencor 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 Tencor are associated (or correlated) with Grupo Aeroportuario. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Aeroportuario del has no effect on the direction of KLA Tencor i.e., KLA Tencor and Grupo Aeroportuario go up and down completely randomly.
Pair Corralation between KLA Tencor and Grupo Aeroportuario
Given the investment horizon of 90 days KLA Tencor is expected to generate 1.05 times more return on investment than Grupo Aeroportuario. However, KLA Tencor is 1.05 times more volatile than Grupo Aeroportuario del. It trades about 0.06 of its potential returns per unit of risk. Grupo Aeroportuario del is currently generating about 0.02 per unit of risk. If you would invest 36,611 in KLA Tencor on September 12, 2024 and sell it today you would earn a total of 27,576 from holding KLA Tencor or generate 75.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KLA Tencor vs. Grupo Aeroportuario del
Performance |
| Timeline |
| KLA Tencor |
| Grupo Aeroportuario del |
KLA Tencor and Grupo Aeroportuario Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KLA Tencor and Grupo Aeroportuario
The main advantage of trading using opposite KLA Tencor and Grupo Aeroportuario positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KLA Tencor position performs unexpectedly, Grupo Aeroportuario 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 Grupo Aeroportuario will offset losses from the drop in Grupo Aeroportuario's long position.| KLA Tencor vs. Applied Materials | KLA Tencor vs. ASML Holding NV | KLA Tencor vs. Axcelis Technologies | KLA Tencor vs. Teradyne |
| Grupo Aeroportuario vs. Grupo Aeroportuario del | Grupo Aeroportuario vs. Corporacion America Airports | Grupo Aeroportuario vs. AerSale Corp | Grupo Aeroportuario vs. Flughafen Zrich AG |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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