Correlation Between Pekin Life and Kulicke

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

By analyzing existing cross correlation between Pekin Life Insurance and Kulicke and Soffa, you can compare the effects of market volatilities on Pekin Life and Kulicke 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 Pekin Life with a short position of Kulicke. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pekin Life and Kulicke.

Diversification Opportunities for Pekin Life and Kulicke

0.76

Correlation Coefficient

Pekin Life  Kulicke

Poor diversification

The 3 months correlation between Pekin and Kulicke is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Pekin Life Insurance and Kulicke and Soffa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kulicke and Soffa and Pekin Life 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 Pekin Life Insurance are associated (or correlated) with Kulicke. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kulicke and Soffa has no effect on the direction of Pekin Life i.e., Pekin Life and Kulicke go up and down completely randomly.

Pair Corralation between Pekin Life and Kulicke

Given the investment horizon of 90 days Pekin Life is expected to generate 3.28 times less return on investment than Kulicke. But when comparing it to its historical volatility, Pekin Life Insurance is 17.06 times less risky than Kulicke. It trades about 0.07 of its potential returns per unit of risk. Kulicke and Soffa is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  4,627  in Kulicke and Soffa on October 2, 2024 and sell it today you would earn a total of  39.00  from holding Kulicke and Soffa or generate 0.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.56%
Values	Daily Returns

Pekin Life Insurance  vs.  Kulicke and Soffa

Pekin Life Insurance

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pekin Life Insurance are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Pekin Life is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Kulicke and Soffa

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kulicke and Soffa are ranked lower than 1 (%) 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.

Pair Trading with Pekin Life and Kulicke

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

The idea behind Pekin Life Insurance and Kulicke and Soffa 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.