Correlation Between KULR Technology and Richardson Electronics

Can any of the company-specific risk be diversified away by investing in both KULR Technology and Richardson Electronics 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 KULR Technology and Richardson Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KULR Technology Group and Richardson Electronics, you can compare the effects of market volatilities on KULR Technology and Richardson Electronics 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 KULR Technology with a short position of Richardson Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of KULR Technology and Richardson Electronics.

Diversification Opportunities for KULR Technology and Richardson Electronics

0.69

Correlation Coefficient

KULR Technology  Richardson Electronics

Poor diversification

The 3 months correlation between KULR and Richardson is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding KULR Technology Group and Richardson Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Richardson Electronics and KULR Technology 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 KULR Technology Group are associated (or correlated) with Richardson Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Richardson Electronics has no effect on the direction of KULR Technology i.e., KULR Technology and Richardson Electronics go up and down completely randomly.

Pair Corralation between KULR Technology and Richardson Electronics

Given the investment horizon of 90 days KULR Technology Group is expected to under-perform the Richardson Electronics. In addition to that, KULR Technology is 3.4 times more volatile than Richardson Electronics. It trades about -0.16 of its total potential returns per unit of risk. Richardson Electronics is currently generating about -0.14 per unit of volatility. If you would invest  1,394  in Richardson Electronics on December 29, 2024 and sell it today you would lose (297.00) from holding Richardson Electronics or give up 21.31% of portfolio value over 90 days.

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

KULR Technology Group  vs.  Richardson Electronics

KULR Technology Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days KULR Technology Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Richardson Electronics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Richardson Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with KULR Technology and Richardson Electronics

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

The idea behind KULR Technology Group and Richardson Electronics 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.