Correlation Between Kulicke and TARGET

Can any of the company-specific risk be diversified away by investing in both Kulicke and TARGET 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 TARGET 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 TARGET P 7, you can compare the effects of market volatilities on Kulicke and TARGET 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 TARGET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kulicke and TARGET.

Diversification Opportunities for Kulicke and TARGET

0.21

Correlation Coefficient

Kulicke  TARGET

Modest diversification

The 3 months correlation between Kulicke and TARGET is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Kulicke and Soffa and TARGET P 7 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TARGET P 7 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 TARGET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TARGET P 7 has no effect on the direction of Kulicke i.e., Kulicke and TARGET go up and down completely randomly.

Pair Corralation between Kulicke and TARGET

Given the investment horizon of 90 days Kulicke and Soffa is expected to under-perform the TARGET. But the stock apears to be less risky and, when comparing its historical volatility, Kulicke and Soffa is 4.07 times less risky than TARGET. The stock trades about -0.14 of its potential returns per unit of risk. The TARGET P 7 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  11,151  in TARGET P 7 on October 10, 2024 and sell it today you would earn a total of  284.00  from holding TARGET P 7 or generate 2.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	35.0%
Values	Daily Returns

Kulicke and Soffa  vs.  TARGET P 7

Kulicke and Soffa

Risk-Adjusted Performance

6 of 100

Insignificant

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

TARGET P 7

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TARGET P 7 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, TARGET is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kulicke and TARGET

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

The idea behind Kulicke and Soffa and TARGET P 7 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.