Correlation Between Kulicke and Lipocine

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

Diversification Opportunities for Kulicke and Lipocine

-0.32

Correlation Coefficient

Kulicke  Lipocine

Very good diversification

The 3 months correlation between Kulicke and Lipocine is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Kulicke and Soffa and Lipocine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lipocine 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 Lipocine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lipocine has no effect on the direction of Kulicke i.e., Kulicke and Lipocine go up and down completely randomly.

Pair Corralation between Kulicke and Lipocine

Given the investment horizon of 90 days Kulicke and Soffa is expected to under-perform the Lipocine. But the stock apears to be less risky and, when comparing its historical volatility, Kulicke and Soffa is 2.84 times less risky than Lipocine. The stock trades about -0.23 of its potential returns per unit of risk. The Lipocine is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  526.00  in Lipocine on October 13, 2024 and sell it today you would lose (37.00) from holding Lipocine or give up 7.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Kulicke and Soffa  vs.  Lipocine

Kulicke and Soffa

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Kulicke and Soffa has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, Kulicke is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Lipocine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lipocine has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Lipocine is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Kulicke and Lipocine

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

The idea behind Kulicke and Soffa and Lipocine 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 CEOs Directory module to screen CEOs from public companies around the world.