Correlation Between Kulicke and Evertz Technologies

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

Diversification Opportunities for Kulicke and Evertz Technologies

-0.12

Correlation Coefficient

Kulicke  Evertz Technologies

Good diversification

The 3 months correlation between Kulicke and Evertz is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Kulicke and Soffa and Evertz Technologies Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evertz Technologies 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 Evertz Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evertz Technologies has no effect on the direction of Kulicke i.e., Kulicke and Evertz Technologies go up and down completely randomly.

Pair Corralation between Kulicke and Evertz Technologies

Given the investment horizon of 90 days Kulicke and Soffa is expected to generate 0.75 times more return on investment than Evertz Technologies. However, Kulicke and Soffa is 1.34 times less risky than Evertz Technologies. It trades about 0.02 of its potential returns per unit of risk. Evertz Technologies Limited is currently generating about -0.01 per unit of risk. If you would invest  4,635  in Kulicke and Soffa on September 24, 2024 and sell it today you would earn a total of  60.00  from holding Kulicke and Soffa or generate 1.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.64%
Values	Daily Returns

Kulicke and Soffa  vs.  Evertz Technologies Limited

Kulicke and Soffa

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kulicke and Soffa are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward indicators, Kulicke may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Evertz Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evertz Technologies Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Evertz Technologies is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Kulicke and Evertz Technologies

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

The idea behind Kulicke and Soffa and Evertz Technologies Limited 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.