Correlation Between TARGET and Kulicke

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

By analyzing existing cross correlation between TARGET P 7 and Kulicke and Soffa, you can compare the effects of market volatilities on TARGET 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 TARGET with a short position of Kulicke. Check out your portfolio center. Please also check ongoing floating volatility patterns of TARGET and Kulicke.

Diversification Opportunities for TARGET and Kulicke

0.27

Correlation Coefficient

TARGET  Kulicke

Modest diversification

The 3 months correlation between TARGET and Kulicke is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding TARGET P 7 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 TARGET 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 TARGET P 7 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 TARGET i.e., TARGET and Kulicke go up and down completely randomly.

Pair Corralation between TARGET and Kulicke

Assuming the 90 days trading horizon TARGET P 7 is expected to generate 0.78 times more return on investment than Kulicke. However, TARGET P 7 is 1.29 times less risky than Kulicke. It trades about 0.24 of its potential returns per unit of risk. Kulicke and Soffa is currently generating about -0.22 per unit of risk. If you would invest  10,910  in TARGET P 7 on December 23, 2024 and sell it today you would earn a total of  804.00  from holding TARGET P 7 or generate 7.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	32.79%
Values	Daily Returns

TARGET P 7  vs.  Kulicke and Soffa

TARGET P 7

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TARGET P 7 are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, TARGET sustained solid returns over the last few months and may actually be approaching a breakup point.

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 TARGET and Kulicke

The main advantage of trading using opposite TARGET and Kulicke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TARGET 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 TARGET P 7 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.