Correlation Between Sequans Communications and KLA Tencor

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

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

Diversification Opportunities for Sequans Communications and KLA Tencor

0.31

Correlation Coefficient

Sequans Communications  KLA Tencor

Weak diversification

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

Pair Corralation between Sequans Communications and KLA Tencor

Given the investment horizon of 90 days Sequans Communications SA is expected to generate 7.16 times more return on investment than KLA Tencor. However, Sequans Communications is 7.16 times more volatile than KLA Tencor. It trades about 0.05 of its potential returns per unit of risk. KLA Tencor is currently generating about 0.22 per unit of risk. If you would invest  146.00  in Sequans Communications SA on May 6, 2025 and sell it today you would lose (8.00) from holding Sequans Communications SA or give up 5.48% of portfolio value over 90 days.

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

Sequans Communications SA  vs.  KLA Tencor

Sequans Communications

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sequans Communications SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Sequans Communications unveiled solid returns over the last few months and may actually be approaching a breakup point.

KLA Tencor

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in KLA Tencor are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, KLA Tencor exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sequans Communications and KLA Tencor

The main advantage of trading using opposite Sequans Communications and KLA Tencor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sequans Communications 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 Sequans Communications SA 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.