Correlation Between Micron Technology and KLA Tencor
Can any of the company-specific risk be diversified away by investing in both Micron Technology and KLA Tencor 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 Micron Technology and KLA Tencor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Micron Technology and KLA Tencor, you can compare the effects of market volatilities on Micron Technology and KLA Tencor 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 Micron Technology with a short position of KLA Tencor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Micron Technology and KLA Tencor.
Diversification Opportunities for Micron Technology and KLA Tencor
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Micron and KLA is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Micron Technology and KLA Tencor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLA Tencor and Micron Technology 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 Micron Technology are associated (or correlated) with KLA Tencor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KLA Tencor has no effect on the direction of Micron Technology i.e., Micron Technology and KLA Tencor go up and down completely randomly.
Pair Corralation between Micron Technology and KLA Tencor
Allowing for the 90-day total investment horizon Micron Technology is expected to generate 1.47 times more return on investment than KLA Tencor. However, Micron Technology is 1.47 times more volatile than KLA Tencor. It trades about 0.03 of its potential returns per unit of risk. KLA Tencor is currently generating about 0.01 per unit of risk. If you would invest 8,837 in Micron Technology on November 2, 2024 and sell it today you would earn a total of 413.00 from holding Micron Technology or generate 4.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Micron Technology vs. KLA Tencor
Performance |
| Timeline |
| Micron Technology |
| KLA Tencor |
Micron Technology and KLA Tencor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Micron Technology and KLA Tencor
The main advantage of trading using opposite Micron Technology and KLA Tencor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Micron Technology position performs unexpectedly, KLA Tencor 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 KLA Tencor will offset losses from the drop in KLA Tencor's long position.| Micron Technology vs. NVIDIA | Micron Technology vs. Intel | Micron Technology vs. Taiwan Semiconductor Manufacturing | Micron Technology vs. Marvell Technology Group |
| KLA Tencor vs. Diodes Incorporated | KLA Tencor vs. Daqo New Energy | KLA Tencor vs. Micron Technology | KLA Tencor vs. MagnaChip Semiconductor |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |