Correlation Between KLA Tencor and Amtech Systems
Can any of the company-specific risk be diversified away by investing in both KLA Tencor and Amtech Systems 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 Amtech Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KLA Tencor and Amtech Systems, you can compare the effects of market volatilities on KLA Tencor and Amtech Systems 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 Amtech Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of KLA Tencor and Amtech Systems.
Diversification Opportunities for KLA Tencor and Amtech Systems
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KLA and Amtech is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding KLA Tencor and Amtech Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amtech Systems 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 Amtech Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amtech Systems has no effect on the direction of KLA Tencor i.e., KLA Tencor and Amtech Systems go up and down completely randomly.
Pair Corralation between KLA Tencor and Amtech Systems
Given the investment horizon of 90 days KLA Tencor is expected to generate 1.15 times more return on investment than Amtech Systems. However, KLA Tencor is 1.15 times more volatile than Amtech Systems. It trades about -0.03 of its potential returns per unit of risk. Amtech Systems is currently generating about -0.06 per unit of risk. If you would invest 77,521 in KLA Tencor on November 1, 2024 and sell it today you would lose (6,224) from holding KLA Tencor or give up 8.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KLA Tencor vs. Amtech Systems
Performance |
| Timeline |
| KLA Tencor |
| Amtech Systems |
KLA Tencor and Amtech Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KLA Tencor and Amtech Systems
The main advantage of trading using opposite KLA Tencor and Amtech Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KLA Tencor position performs unexpectedly, Amtech Systems 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 Amtech Systems will offset losses from the drop in Amtech Systems' long position.| KLA Tencor vs. Diodes Incorporated | KLA Tencor vs. Daqo New Energy | KLA Tencor vs. Micron Technology | KLA Tencor vs. MagnaChip Semiconductor |
| Amtech Systems vs. Diodes Incorporated | Amtech Systems vs. Daqo New Energy | Amtech Systems vs. Micron Technology | Amtech Systems vs. MagnaChip Semiconductor |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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