Correlation Between KLA Tencor and GCT Semiconductor
Can any of the company-specific risk be diversified away by investing in both KLA Tencor and GCT Semiconductor 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 GCT Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KLA Tencor and GCT Semiconductor Holding, you can compare the effects of market volatilities on KLA Tencor and GCT Semiconductor 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 GCT Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of KLA Tencor and GCT Semiconductor.
Diversification Opportunities for KLA Tencor and GCT Semiconductor
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KLA and GCT is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding KLA Tencor and GCT Semiconductor Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GCT Semiconductor Holding 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 GCT Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GCT Semiconductor Holding has no effect on the direction of KLA Tencor i.e., KLA Tencor and GCT Semiconductor go up and down completely randomly.
Pair Corralation between KLA Tencor and GCT Semiconductor
Given the investment horizon of 90 days KLA Tencor is expected to generate 8.3 times less return on investment than GCT Semiconductor. But when comparing it to its historical volatility, KLA Tencor is 15.92 times less risky than GCT Semiconductor. It trades about 0.07 of its potential returns per unit of risk. GCT Semiconductor Holding is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,049 in GCT Semiconductor Holding on November 19, 2024 and sell it today you would lose (834.00) from holding GCT Semiconductor Holding or give up 79.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 45.97% |
| Values | Daily Returns |
KLA Tencor vs. GCT Semiconductor Holding
Performance |
| Timeline |
| KLA Tencor |
| GCT Semiconductor Holding |
KLA Tencor and GCT Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KLA Tencor and GCT Semiconductor
The main advantage of trading using opposite KLA Tencor and GCT Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KLA Tencor position performs unexpectedly, GCT Semiconductor 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 GCT Semiconductor will offset losses from the drop in GCT Semiconductor's long position.| KLA Tencor vs. Applied Materials | KLA Tencor vs. ASML Holding NV | KLA Tencor vs. Axcelis Technologies | KLA Tencor vs. Teradyne |
| GCT Semiconductor vs. Lery Seafood Group | GCT Semiconductor vs. McGrath RentCorp | GCT Semiconductor vs. Triton International Limited | GCT Semiconductor vs. Multi Ways Holdings |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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