Correlation Between Western Union and KLA Tencor
Can any of the company-specific risk be diversified away by investing in both Western Union 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 Western Union and KLA Tencor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Union Co and KLA Tencor, you can compare the effects of market volatilities on Western Union 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 Western Union with a short position of KLA Tencor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Union and KLA Tencor.
Diversification Opportunities for Western Union and KLA Tencor
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and KLA is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Western Union Co and KLA Tencor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLA Tencor and Western Union 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 Western Union Co 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 Western Union i.e., Western Union and KLA Tencor go up and down completely randomly.
Pair Corralation between Western Union and KLA Tencor
Allowing for the 90-day total investment horizon Western Union Co is expected to generate 0.56 times more return on investment than KLA Tencor. However, Western Union Co is 1.78 times less risky than KLA Tencor. It trades about 0.12 of its potential returns per unit of risk. KLA Tencor is currently generating about -0.05 per unit of risk. If you would invest 1,061 in Western Union Co on September 13, 2024 and sell it today you would earn a total of 29.00 from holding Western Union Co or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Union Co vs. KLA Tencor
Performance |
| Timeline |
| Western Union |
| KLA Tencor |
Western Union and KLA Tencor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Union and KLA Tencor
The main advantage of trading using opposite Western Union and KLA Tencor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Union 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.| Western Union vs. Navient Corp | Western Union vs. Green Dot | Western Union vs. Orix Corp Ads | Western Union vs. FirstCash |
| KLA Tencor vs. Applied Materials | KLA Tencor vs. ASML Holding NV | KLA Tencor vs. Axcelis Technologies | KLA Tencor vs. Teradyne |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |