Correlation Between KLA Tencor and Radcom
Can any of the company-specific risk be diversified away by investing in both KLA Tencor and Radcom 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 Radcom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KLA Tencor and Radcom, you can compare the effects of market volatilities on KLA Tencor and Radcom 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 Radcom. Check out your portfolio center. Please also check ongoing floating volatility patterns of KLA Tencor and Radcom.
Diversification Opportunities for KLA Tencor and Radcom
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KLA and Radcom is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding KLA Tencor and Radcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radcom 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 Radcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radcom has no effect on the direction of KLA Tencor i.e., KLA Tencor and Radcom go up and down completely randomly.
Pair Corralation between KLA Tencor and Radcom
Given the investment horizon of 90 days KLA Tencor is expected to under-perform the Radcom. But the stock apears to be less risky and, when comparing its historical volatility, KLA Tencor is 1.22 times less risky than Radcom. The stock trades about -0.14 of its potential returns per unit of risk. The Radcom is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,034 in Radcom on August 30, 2024 and sell it today you would earn a total of 151.00 from holding Radcom or generate 14.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KLA Tencor vs. Radcom
Performance |
| Timeline |
| KLA Tencor |
| Radcom |
KLA Tencor and Radcom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KLA Tencor and Radcom
The main advantage of trading using opposite KLA Tencor and Radcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KLA Tencor position performs unexpectedly, Radcom 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 Radcom will offset losses from the drop in Radcom's long position.| KLA Tencor vs. First Solar | KLA Tencor vs. Sunrun Inc | KLA Tencor vs. Canadian Solar | KLA Tencor vs. SolarEdge Technologies |
| Radcom vs. Shenandoah Telecommunications Co | Radcom vs. Anterix | Radcom vs. SK Telecom Co | Radcom vs. Liberty Broadband Srs |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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