Correlation Between Kulicke and AKITA Drilling

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

By analyzing existing cross correlation between Kulicke and Soffa and AKITA Drilling, you can compare the effects of market volatilities on Kulicke and AKITA Drilling 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 Kulicke with a short position of AKITA Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kulicke and AKITA Drilling.

Diversification Opportunities for Kulicke and AKITA Drilling

0.26

Correlation Coefficient

Kulicke  AKITA Drilling

Modest diversification

The 3 months correlation between Kulicke and AKITA is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Kulicke and Soffa and AKITA Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKITA Drilling and Kulicke 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 Kulicke and Soffa are associated (or correlated) with AKITA Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKITA Drilling has no effect on the direction of Kulicke i.e., Kulicke and AKITA Drilling go up and down completely randomly.

Pair Corralation between Kulicke and AKITA Drilling

Given the investment horizon of 90 days Kulicke and Soffa is expected to under-perform the AKITA Drilling. In addition to that, Kulicke is 1.96 times more volatile than AKITA Drilling. It trades about -0.09 of its total potential returns per unit of risk. AKITA Drilling is currently generating about -0.1 per unit of volatility. If you would invest  118.00  in AKITA Drilling on September 23, 2024 and sell it today you would lose (3.00) from holding AKITA Drilling or give up 2.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Kulicke and Soffa  vs.  AKITA Drilling

Kulicke and Soffa

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kulicke and Soffa are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, Kulicke exhibited solid returns over the last few months and may actually be approaching a breakup point.

AKITA Drilling

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AKITA Drilling are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, AKITA Drilling may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Kulicke and AKITA Drilling

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

The idea behind Kulicke and Soffa and AKITA Drilling 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.