Correlation Between KLA Tencor and Intellicheck Mobilisa

Can any of the company-specific risk be diversified away by investing in both KLA Tencor and Intellicheck Mobilisa 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 Intellicheck Mobilisa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KLA Tencor and Intellicheck Mobilisa, you can compare the effects of market volatilities on KLA Tencor and Intellicheck Mobilisa 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 Intellicheck Mobilisa. Check out your portfolio center. Please also check ongoing floating volatility patterns of KLA Tencor and Intellicheck Mobilisa.

Diversification Opportunities for KLA Tencor and Intellicheck Mobilisa

-0.71

Correlation Coefficient

KLA Tencor  Intellicheck Mobilisa

Pay attention - limited upside

The 3 months correlation between KLA and Intellicheck is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding KLA Tencor and Intellicheck Mobilisa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intellicheck Mobilisa 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 Intellicheck Mobilisa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intellicheck Mobilisa has no effect on the direction of KLA Tencor i.e., KLA Tencor and Intellicheck Mobilisa go up and down completely randomly.

Pair Corralation between KLA Tencor and Intellicheck Mobilisa

Given the investment horizon of 90 days KLA Tencor is expected to generate 1.32 times less return on investment than Intellicheck Mobilisa. But when comparing it to its historical volatility, KLA Tencor is 2.27 times less risky than Intellicheck Mobilisa. It trades about 0.05 of its potential returns per unit of risk. Intellicheck Mobilisa is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  262.00  in Intellicheck Mobilisa on October 4, 2024 and sell it today you would earn a total of  27.00  from holding Intellicheck Mobilisa or generate 10.31% 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.  Intellicheck Mobilisa

KLA Tencor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KLA Tencor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Intellicheck Mobilisa

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intellicheck Mobilisa are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile fundamental indicators, Intellicheck Mobilisa displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KLA Tencor and Intellicheck Mobilisa

The main advantage of trading using opposite KLA Tencor and Intellicheck Mobilisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KLA Tencor position performs unexpectedly, Intellicheck Mobilisa 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 Intellicheck Mobilisa will offset losses from the drop in Intellicheck Mobilisa's long position.

The idea behind KLA Tencor and Intellicheck Mobilisa pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.