Correlation Between KLA Tencor and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both KLA Tencor and Canlan Ice 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 Canlan Ice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KLA Tencor and Canlan Ice Sports, you can compare the effects of market volatilities on KLA Tencor and Canlan Ice 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 Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of KLA Tencor and Canlan Ice.
Diversification Opportunities for KLA Tencor and Canlan Ice
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KLA and Canlan is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding KLA Tencor and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports 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 Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of KLA Tencor i.e., KLA Tencor and Canlan Ice go up and down completely randomly.
Pair Corralation between KLA Tencor and Canlan Ice
Given the investment horizon of 90 days KLA Tencor is expected to generate 25.17 times more return on investment than Canlan Ice. However, KLA Tencor is 25.17 times more volatile than Canlan Ice Sports. It trades about 0.04 of its potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.14 per unit of risk. If you would invest 53,484 in KLA Tencor on August 29, 2024 and sell it today you would earn a total of 9,730 from holding KLA Tencor or generate 18.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
KLA Tencor vs. Canlan Ice Sports
Performance |
| Timeline |
| KLA Tencor |
| Canlan Ice Sports |
KLA Tencor and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KLA Tencor and Canlan Ice
The main advantage of trading using opposite KLA Tencor and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KLA Tencor position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice's long position.| KLA Tencor vs. Applied Materials | KLA Tencor vs. ASML Holding NV | KLA Tencor vs. Axcelis Technologies | KLA Tencor vs. Teradyne |
| Canlan Ice vs. ANTA Sports Products | Canlan Ice vs. ANTA Sports Products | Canlan Ice vs. Carnival Plc ADS |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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