Correlation Between Kulicke and APACHE

Can any of the company-specific risk be diversified away by investing in both Kulicke and APACHE 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 APACHE 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 APACHE P 6, you can compare the effects of market volatilities on Kulicke and APACHE 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 APACHE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kulicke and APACHE.

Diversification Opportunities for Kulicke and APACHE

0.36

Correlation Coefficient

Kulicke  APACHE

Weak diversification

The 3 months correlation between Kulicke and APACHE is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Kulicke and Soffa and APACHE P 6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APACHE P 6 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 APACHE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APACHE P 6 has no effect on the direction of Kulicke i.e., Kulicke and APACHE go up and down completely randomly.

Pair Corralation between Kulicke and APACHE

Given the investment horizon of 90 days Kulicke and Soffa is expected to under-perform the APACHE. In addition to that, Kulicke is 1.27 times more volatile than APACHE P 6. It trades about -0.25 of its total potential returns per unit of risk. APACHE P 6 is currently generating about 0.08 per unit of volatility. If you would invest  9,860  in APACHE P 6 on December 30, 2024 and sell it today you would earn a total of  478.00  from holding APACHE P 6 or generate 4.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	62.9%
Values	Daily Returns

Kulicke and Soffa  vs.  APACHE P 6

Kulicke and Soffa

Risk-Adjusted Performance

Very 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 uncertain performance in the last few months, the Stock's forward indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

APACHE P 6

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in APACHE P 6 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, APACHE may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Kulicke and APACHE

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

The idea behind Kulicke and Soffa and APACHE P 6 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.