Correlation Between KROGER and Kulicke

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

By analyzing existing cross correlation between KROGER 8 percent and Kulicke and Soffa, you can compare the effects of market volatilities on KROGER 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 KROGER with a short position of Kulicke. Check out your portfolio center. Please also check ongoing floating volatility patterns of KROGER and Kulicke.

Diversification Opportunities for KROGER and Kulicke

-0.16

Correlation Coefficient

KROGER  Kulicke

Good diversification

The 3 months correlation between KROGER and Kulicke is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding KROGER 8 percent 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 KROGER 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 KROGER 8 percent 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 KROGER i.e., KROGER and Kulicke go up and down completely randomly.

Pair Corralation between KROGER and Kulicke

Assuming the 90 days trading horizon KROGER 8 percent is expected to generate 0.34 times more return on investment than Kulicke. However, KROGER 8 percent is 2.91 times less risky than Kulicke. It trades about 0.08 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  11,314  in KROGER 8 percent on December 4, 2024 and sell it today you would earn a total of  341.00  from holding KROGER 8 percent or generate 3.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	89.83%
Values	Daily Returns

KROGER 8 percent  vs.  Kulicke and Soffa

KROGER 8 percent

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in KROGER 8 percent are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, KROGER is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 KROGER and Kulicke

The main advantage of trading using opposite KROGER and Kulicke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KROGER 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 KROGER 8 percent 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.