Correlation Between NBCUNIVERSAL and Kulicke

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

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

Diversification Opportunities for NBCUNIVERSAL and Kulicke

-0.59

Correlation Coefficient

NBCUNIVERSAL  Kulicke

Excellent diversification

The 3 months correlation between NBCUNIVERSAL and Kulicke is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding NBCUNIVERSAL MEDIA LLC 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 NBCUNIVERSAL 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 NBCUNIVERSAL MEDIA LLC 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 NBCUNIVERSAL i.e., NBCUNIVERSAL and Kulicke go up and down completely randomly.

Pair Corralation between NBCUNIVERSAL and Kulicke

Assuming the 90 days trading horizon NBCUNIVERSAL MEDIA LLC is expected to generate 0.41 times more return on investment than Kulicke. However, NBCUNIVERSAL MEDIA LLC is 2.44 times less risky than Kulicke. It trades about -0.17 of its potential returns per unit of risk. Kulicke and Soffa is currently generating about -0.1 per unit of risk. If you would invest  8,907  in NBCUNIVERSAL MEDIA LLC on September 24, 2024 and sell it today you would lose (227.00) from holding NBCUNIVERSAL MEDIA LLC or give up 2.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	80.95%
Values	Daily Returns

NBCUNIVERSAL MEDIA LLC  vs.  Kulicke and Soffa

NBCUNIVERSAL MEDIA LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NBCUNIVERSAL MEDIA LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for NBCUNIVERSAL MEDIA LLC investors.

Kulicke and Soffa

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kulicke and Soffa are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward indicators, Kulicke exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NBCUNIVERSAL and Kulicke

The main advantage of trading using opposite NBCUNIVERSAL and Kulicke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBCUNIVERSAL 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 NBCUNIVERSAL MEDIA LLC 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.