Correlation Between Kulicke and NISOURCE

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

Diversification Opportunities for Kulicke and NISOURCE

-0.46

Correlation Coefficient

Kulicke  NISOURCE

Very good diversification

The 3 months correlation between Kulicke and NISOURCE is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Kulicke and Soffa and NISOURCE FIN P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISOURCE FIN P 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 NISOURCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NISOURCE FIN P has no effect on the direction of Kulicke i.e., Kulicke and NISOURCE go up and down completely randomly.

Pair Corralation between Kulicke and NISOURCE

Given the investment horizon of 90 days Kulicke and Soffa is expected to generate 2.35 times more return on investment than NISOURCE. However, Kulicke is 2.35 times more volatile than NISOURCE FIN P. It trades about 0.06 of its potential returns per unit of risk. NISOURCE FIN P is currently generating about -0.1 per unit of risk. If you would invest  4,443  in Kulicke and Soffa on October 8, 2024 and sell it today you would earn a total of  289.00  from holding Kulicke and Soffa or generate 6.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	74.19%
Values	Daily Returns

Kulicke and Soffa  vs.  NISOURCE FIN P

Kulicke and Soffa

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kulicke and Soffa are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, Kulicke may actually be approaching a critical reversion point that can send shares even higher in February 2025.

NISOURCE FIN P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NISOURCE FIN P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NISOURCE is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kulicke and NISOURCE

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

The idea behind Kulicke and Soffa and NISOURCE FIN P 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.