Correlation Between Wisekey International and KLA Tencor

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

By analyzing existing cross correlation between Wisekey International Holding and KLA Tencor, you can compare the effects of market volatilities on Wisekey International 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 Wisekey International with a short position of KLA Tencor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wisekey International and KLA Tencor.

Diversification Opportunities for Wisekey International and KLA Tencor

-0.31

Correlation Coefficient

Wisekey International  KLA Tencor

Very good diversification

The 3 months correlation between Wisekey and KLA is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Wisekey International Holding and KLA Tencor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLA Tencor and Wisekey International 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 Wisekey International Holding 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 Wisekey International i.e., Wisekey International and KLA Tencor go up and down completely randomly.

Pair Corralation between Wisekey International and KLA Tencor

Given the investment horizon of 90 days Wisekey International Holding is expected to under-perform the KLA Tencor. In addition to that, Wisekey International is 5.03 times more volatile than KLA Tencor. It trades about -0.1 of its total potential returns per unit of risk. KLA Tencor is currently generating about 0.07 per unit of volatility. If you would invest  64,709  in KLA Tencor on December 26, 2024 and sell it today you would earn a total of  5,370  from holding KLA Tencor or generate 8.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Wisekey International Holding  vs.  KLA Tencor

Wisekey International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wisekey International Holding 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 technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

KLA Tencor

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in KLA Tencor are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, KLA Tencor may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Wisekey International and KLA Tencor

The main advantage of trading using opposite Wisekey International and KLA Tencor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wisekey International 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.

The idea behind Wisekey International Holding and KLA Tencor 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.