Correlation Between Kulicke and Falcons Beyond

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

Diversification Opportunities for Kulicke and Falcons Beyond

0.2

Correlation Coefficient

Kulicke  Falcons Beyond

Modest diversification

The 3 months correlation between Kulicke and Falcons is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Kulicke and Soffa and Falcons Beyond Global, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falcons Beyond Global, 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 Falcons Beyond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falcons Beyond Global, has no effect on the direction of Kulicke i.e., Kulicke and Falcons Beyond go up and down completely randomly.

Pair Corralation between Kulicke and Falcons Beyond

Given the investment horizon of 90 days Kulicke and Soffa is expected to generate 0.28 times more return on investment than Falcons Beyond. However, Kulicke and Soffa is 3.54 times less risky than Falcons Beyond. It trades about -0.01 of its potential returns per unit of risk. Falcons Beyond Global, is currently generating about -0.04 per unit of risk. If you would invest  5,666  in Kulicke and Soffa on October 24, 2024 and sell it today you would lose (973.00) from holding Kulicke and Soffa or give up 17.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.38%
Values	Daily Returns

Kulicke and Soffa  vs.  Falcons Beyond Global,

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 weak forward indicators, Kulicke may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Falcons Beyond Global,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Falcons Beyond Global, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Kulicke and Falcons Beyond

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

The idea behind Kulicke and Soffa and Falcons Beyond Global, 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.

Check out your portfolio center.

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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.