Correlation Between Photronics and Kulicke
Can any of the company-specific risk be diversified away by investing in both Photronics 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 Photronics and Kulicke into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Photronics and Kulicke and Soffa, you can compare the effects of market volatilities on Photronics 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 Photronics with a short position of Kulicke. Check out your portfolio center. Please also check ongoing floating volatility patterns of Photronics and Kulicke.
Diversification Opportunities for Photronics and Kulicke
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Photronics and Kulicke is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Photronics 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 Photronics 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 Photronics 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 Photronics i.e., Photronics and Kulicke go up and down completely randomly.
Pair Corralation between Photronics and Kulicke
Given the investment horizon of 90 days Photronics is expected to under-perform the Kulicke. But the stock apears to be less risky and, when comparing its historical volatility, Photronics is 1.19 times less risky than Kulicke. The stock trades about -0.27 of its potential returns per unit of risk. The Kulicke and Soffa is currently generating about -0.19 of returns per unit of risk over similar time horizon. If you would invest 4,288 in Kulicke and Soffa on November 28, 2024 and sell it today you would lose (311.00) from holding Kulicke and Soffa or give up 7.25% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Photronics vs. Kulicke and Soffa
Performance |
Timeline |
Photronics |
Kulicke and Soffa |
Photronics and Kulicke Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Photronics and Kulicke
The main advantage of trading using opposite Photronics and Kulicke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Photronics 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.Photronics vs. Aehr Test Systems | Photronics vs. Lam Research Corp | Photronics vs. KLA Tencor | Photronics vs. Kulicke and Soffa |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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