Correlation Between Kulicke and Coda Octopus

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Can any of the company-specific risk be diversified away by investing in both Kulicke and Coda Octopus 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 Coda Octopus 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 Coda Octopus Group, you can compare the effects of market volatilities on Kulicke and Coda Octopus 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 Coda Octopus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kulicke and Coda Octopus.

Diversification Opportunities for Kulicke and Coda Octopus

0.79
  Correlation Coefficient

Poor diversification

The 3 months correlation between Kulicke and Coda is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Kulicke and Soffa and Coda Octopus Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coda Octopus Group 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 Coda Octopus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coda Octopus Group has no effect on the direction of Kulicke i.e., Kulicke and Coda Octopus go up and down completely randomly.

Pair Corralation between Kulicke and Coda Octopus

Given the investment horizon of 90 days Kulicke and Soffa is expected to generate 0.68 times more return on investment than Coda Octopus. However, Kulicke and Soffa is 1.46 times less risky than Coda Octopus. It trades about 0.18 of its potential returns per unit of risk. Coda Octopus Group is currently generating about -0.02 per unit of risk. If you would invest  4,633  in Kulicke and Soffa on September 19, 2024 and sell it today you would earn a total of  378.00  from holding Kulicke and Soffa or generate 8.16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Kulicke and Soffa  vs.  Coda Octopus Group

 Performance 
       Timeline  
Kulicke and Soffa 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Kulicke and Soffa are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward indicators, Kulicke exhibited solid returns over the last few months and may actually be approaching a breakup point.
Coda Octopus Group 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Coda Octopus Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Coda Octopus sustained solid returns over the last few months and may actually be approaching a breakup point.

Kulicke and Coda Octopus Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kulicke and Coda Octopus

The main advantage of trading using opposite Kulicke and Coda Octopus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kulicke position performs unexpectedly, Coda Octopus 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 Coda Octopus will offset losses from the drop in Coda Octopus' long position.
The idea behind Kulicke and Soffa and Coda Octopus Group 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

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