Correlation Between RBC Bearings and Kulicke

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

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

Diversification Opportunities for RBC Bearings and Kulicke

-0.61

Correlation Coefficient

RBC Bearings  Kulicke

Excellent diversification

The 3 months correlation between RBC and Kulicke is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding RBC Bearings Incorporated 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 RBC Bearings 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 RBC Bearings Incorporated 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 RBC Bearings i.e., RBC Bearings and Kulicke go up and down completely randomly.

Pair Corralation between RBC Bearings and Kulicke

Considering the 90-day investment horizon RBC Bearings Incorporated is expected to generate 0.91 times more return on investment than Kulicke. However, RBC Bearings Incorporated is 1.09 times less risky than Kulicke. It trades about 0.09 of its potential returns per unit of risk. Kulicke and Soffa is currently generating about -0.24 per unit of risk. If you would invest  30,393  in RBC Bearings Incorporated on December 26, 2024 and sell it today you would earn a total of  2,843  from holding RBC Bearings Incorporated or generate 9.35% return on investment over 90 days.

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

RBC Bearings Incorporated  vs.  Kulicke and Soffa

RBC Bearings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in RBC Bearings Incorporated are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental drivers, RBC Bearings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Kulicke and Soffa

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kulicke and Soffa has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with RBC Bearings and Kulicke

The main advantage of trading using opposite RBC Bearings and Kulicke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBC Bearings 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 RBC Bearings Incorporated 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.