Correlation Between Trupanion and KLA Tencor
Can any of the company-specific risk be diversified away by investing in both Trupanion 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 Trupanion and KLA Tencor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trupanion and KLA Tencor, you can compare the effects of market volatilities on Trupanion 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 Trupanion with a short position of KLA Tencor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trupanion and KLA Tencor.
Diversification Opportunities for Trupanion and KLA Tencor
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Trupanion and KLA is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Trupanion and KLA Tencor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLA Tencor and Trupanion 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 Trupanion 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 Trupanion i.e., Trupanion and KLA Tencor go up and down completely randomly.
Pair Corralation between Trupanion and KLA Tencor
Given the investment horizon of 90 days Trupanion is expected to generate 2.01 times more return on investment than KLA Tencor. However, Trupanion is 2.01 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 0.05 per unit of risk. If you would invest 5,215 in Trupanion on August 29, 2024 and sell it today you would earn a total of 220.00 from holding Trupanion or generate 4.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trupanion vs. KLA Tencor
Performance |
| Timeline |
| Trupanion |
| KLA Tencor |
Trupanion and KLA Tencor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trupanion and KLA Tencor
The main advantage of trading using opposite Trupanion and KLA Tencor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trupanion 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.| Trupanion vs. First American | Trupanion vs. Assurant | Trupanion vs. NMI Holdings | Trupanion vs. MGIC Investment Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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