Correlation Between Kulicke and NBCUNIVERSAL

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

Diversification Opportunities for Kulicke and NBCUNIVERSAL

-0.62

Correlation Coefficient

Kulicke  NBCUNIVERSAL

Excellent diversification

The 3 months correlation between Kulicke and NBCUNIVERSAL is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Kulicke and Soffa and NBCUNIVERSAL MEDIA LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBCUNIVERSAL MEDIA LLC 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 NBCUNIVERSAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBCUNIVERSAL MEDIA LLC has no effect on the direction of Kulicke i.e., Kulicke and NBCUNIVERSAL go up and down completely randomly.

Pair Corralation between Kulicke and NBCUNIVERSAL

Given the investment horizon of 90 days Kulicke and Soffa is expected to generate 2.89 times more return on investment than NBCUNIVERSAL. However, Kulicke is 2.89 times more volatile than NBCUNIVERSAL MEDIA LLC. It trades about 0.09 of its potential returns per unit of risk. NBCUNIVERSAL MEDIA LLC is currently generating about -0.14 per unit of risk. If you would invest  4,204  in Kulicke and Soffa on September 25, 2024 and sell it today you would earn a total of  540.00  from holding Kulicke and Soffa or generate 12.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	77.78%
Values	Daily Returns

Kulicke and Soffa  vs.  NBCUNIVERSAL MEDIA LLC

Kulicke and Soffa

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kulicke and Soffa are ranked lower than 7 (%) 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.

NBCUNIVERSAL MEDIA LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NBCUNIVERSAL MEDIA LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for NBCUNIVERSAL MEDIA LLC investors.

Pair Trading with Kulicke and NBCUNIVERSAL

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

The idea behind Kulicke and Soffa and NBCUNIVERSAL MEDIA LLC 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.