Correlation Between KLA Tencor and ASML Holding
Can any of the company-specific risk be diversified away by investing in both KLA Tencor and ASML Holding 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 ASML Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KLA Tencor and ASML Holding NV, you can compare the effects of market volatilities on KLA Tencor and ASML Holding 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 ASML Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of KLA Tencor and ASML Holding.
Diversification Opportunities for KLA Tencor and ASML Holding
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between KLA and ASML is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding KLA Tencor and ASML Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASML Holding NV 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 ASML Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASML Holding NV has no effect on the direction of KLA Tencor i.e., KLA Tencor and ASML Holding go up and down completely randomly.
Pair Corralation between KLA Tencor and ASML Holding
Given the investment horizon of 90 days KLA Tencor is expected to generate 0.9 times more return on investment than ASML Holding. However, KLA Tencor is 1.11 times less risky than ASML Holding. It trades about -0.17 of its potential returns per unit of risk. ASML Holding NV is currently generating about -0.16 per unit of risk. If you would invest 69,595 in KLA Tencor on January 20, 2024 and sell it today you would lose (5,173) from holding KLA Tencor or give up 7.43% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 95.45% |
Values | Daily Returns |
KLA Tencor vs. ASML Holding NV
Performance |
Timeline |
KLA Tencor |
ASML Holding NV |
KLA Tencor and ASML Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KLA Tencor and ASML Holding
The main advantage of trading using opposite KLA Tencor and ASML Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KLA Tencor position performs unexpectedly, ASML Holding 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 ASML Holding will offset losses from the drop in ASML Holding's long position.KLA Tencor vs. Applied Materials | KLA Tencor vs. ASML Holding NV | KLA Tencor vs. Axcelis Technologies | KLA Tencor vs. Teradyne |
ASML Holding vs. Applied Materials | ASML Holding vs. KLA Tencor | ASML Holding vs. Axcelis Technologies | ASML Holding 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
CEOs Directory Screen CEOs from public companies around the world |