Correlation Between Kulicke and Vast Renewables

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

Diversification Opportunities for Kulicke and Vast Renewables

0.08

Correlation Coefficient

Kulicke  Vast Renewables

Significant diversification

The 3 months correlation between Kulicke and Vast is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Kulicke and Soffa and Vast Renewables Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vast Renewables 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 Vast Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vast Renewables has no effect on the direction of Kulicke i.e., Kulicke and Vast Renewables go up and down completely randomly.

Pair Corralation between Kulicke and Vast Renewables

Given the investment horizon of 90 days Kulicke and Soffa is expected to generate 0.32 times more return on investment than Vast Renewables. However, Kulicke and Soffa is 3.13 times less risky than Vast Renewables. It trades about -0.17 of its potential returns per unit of risk. Vast Renewables Limited is currently generating about -0.15 per unit of risk. If you would invest  4,800  in Kulicke and Soffa on October 25, 2024 and sell it today you would lose (218.00) from holding Kulicke and Soffa or give up 4.54% of portfolio value over 90 days.

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

Kulicke and Soffa  vs.  Vast Renewables Limited

Kulicke and Soffa

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kulicke and Soffa are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward indicators, Kulicke is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Vast Renewables

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vast Renewables Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Vast Renewables exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kulicke and Vast Renewables

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

The idea behind Kulicke and Soffa and Vast Renewables Limited 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.