Correlation Between ASM International and KLA

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

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

Diversification Opportunities for ASM International and KLA

0.95

Correlation Coefficient

ASM International  KLA

Almost no diversification

The 3 months correlation between ASM and KLA is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding ASM International NV and KLA Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLA Corporation and ASM 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 ASM International NV are associated (or correlated) with KLA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KLA Corporation has no effect on the direction of ASM International i.e., ASM International and KLA go up and down completely randomly.

Pair Corralation between ASM International and KLA

Assuming the 90 days horizon ASM International is expected to generate 1.27 times less return on investment than KLA. In addition to that, ASM International is 1.07 times more volatile than KLA Corporation. It trades about 0.23 of its total potential returns per unit of risk. KLA Corporation is currently generating about 0.31 per unit of volatility. If you would invest  53,413  in KLA Corporation on April 22, 2025 and sell it today you would earn a total of  27,517  from holding KLA Corporation or generate 51.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

ASM International NV  vs.  KLA Corp.

ASM International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ASM International NV are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, ASM International reported solid returns over the last few months and may actually be approaching a breakup point.

KLA Corporation

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in KLA Corporation are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, KLA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ASM International and KLA

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

The idea behind ASM International NV and KLA Corporation 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.