Correlation Between KLA Tencor and Jutal Offshore
Can any of the company-specific risk be diversified away by investing in both KLA Tencor and Jutal Offshore 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 Jutal Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KLA Tencor and Jutal Offshore Oil, you can compare the effects of market volatilities on KLA Tencor and Jutal Offshore 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 Jutal Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of KLA Tencor and Jutal Offshore.
Diversification Opportunities for KLA Tencor and Jutal Offshore
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KLA and Jutal is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding KLA Tencor and Jutal Offshore Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jutal Offshore Oil 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 Jutal Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jutal Offshore Oil has no effect on the direction of KLA Tencor i.e., KLA Tencor and Jutal Offshore go up and down completely randomly.
Pair Corralation between KLA Tencor and Jutal Offshore
Given the investment horizon of 90 days KLA Tencor is expected to under-perform the Jutal Offshore. In addition to that, KLA Tencor is 1.24 times more volatile than Jutal Offshore Oil. It trades about -0.1 of its total potential returns per unit of risk. Jutal Offshore Oil is currently generating about 0.14 per unit of volatility. If you would invest 1,560 in Jutal Offshore Oil on August 28, 2024 and sell it today you would earn a total of 350.00 from holding Jutal Offshore Oil or generate 22.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KLA Tencor vs. Jutal Offshore Oil
Performance |
| Timeline |
| KLA Tencor |
| Jutal Offshore Oil |
KLA Tencor and Jutal Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KLA Tencor and Jutal Offshore
The main advantage of trading using opposite KLA Tencor and Jutal Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KLA Tencor position performs unexpectedly, Jutal Offshore 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 Jutal Offshore will offset losses from the drop in Jutal Offshore's long position.The idea behind KLA Tencor and Jutal Offshore Oil 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.| Jutal Offshore vs. Expro Group Holdings | Jutal Offshore vs. ChampionX | Jutal Offshore vs. Ranger Energy Services | Jutal Offshore vs. Cactus Inc |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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