Correlation Between KLA Tencor and Oak Woods
Can any of the company-specific risk be diversified away by investing in both KLA Tencor and Oak Woods 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 Oak Woods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KLA Tencor and Oak Woods Acquisition, you can compare the effects of market volatilities on KLA Tencor and Oak Woods 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 Oak Woods. Check out your portfolio center. Please also check ongoing floating volatility patterns of KLA Tencor and Oak Woods.
Diversification Opportunities for KLA Tencor and Oak Woods
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between KLA and Oak is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding KLA Tencor and Oak Woods Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oak Woods Acquisition 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 Oak Woods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oak Woods Acquisition has no effect on the direction of KLA Tencor i.e., KLA Tencor and Oak Woods go up and down completely randomly.
Pair Corralation between KLA Tencor and Oak Woods
Given the investment horizon of 90 days KLA Tencor is expected to generate 1.71 times less return on investment than Oak Woods. In addition to that, KLA Tencor is 2.89 times more volatile than Oak Woods Acquisition. It trades about 0.01 of its total potential returns per unit of risk. Oak Woods Acquisition is currently generating about 0.03 per unit of volatility. If you would invest 1,106 in Oak Woods Acquisition on October 26, 2024 and sell it today you would earn a total of 38.00 from holding Oak Woods Acquisition or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
KLA Tencor vs. Oak Woods Acquisition
Performance |
| Timeline |
| KLA Tencor |
| Oak Woods Acquisition |
KLA Tencor and Oak Woods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KLA Tencor and Oak Woods
The main advantage of trading using opposite KLA Tencor and Oak Woods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KLA Tencor position performs unexpectedly, Oak Woods 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 Oak Woods will offset losses from the drop in Oak Woods' long position.| KLA Tencor vs. Applied Materials | KLA Tencor vs. ASML Holding NV | KLA Tencor vs. Axcelis Technologies | KLA Tencor vs. Teradyne |
| Oak Woods vs. KLA Tencor | Oak Woods vs. MACOM Technology Solutions | Oak Woods vs. MagnaChip Semiconductor | Oak Woods vs. Nordic Semiconductor ASA |
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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