Correlation Between Axalta Coating and Kulicke
Can any of the company-specific risk be diversified away by investing in both Axalta Coating 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 Axalta Coating and Kulicke into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axalta Coating Systems and Kulicke and Soffa, you can compare the effects of market volatilities on Axalta Coating 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 Axalta Coating with a short position of Kulicke. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axalta Coating and Kulicke.
Diversification Opportunities for Axalta Coating and Kulicke
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Axalta and Kulicke is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Axalta Coating Systems 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 Axalta Coating 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 Axalta Coating Systems 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 Axalta Coating i.e., Axalta Coating and Kulicke go up and down completely randomly.
Pair Corralation between Axalta Coating and Kulicke
Given the investment horizon of 90 days Axalta Coating is expected to generate 1.02 times less return on investment than Kulicke. But when comparing it to its historical volatility, Axalta Coating Systems is 1.64 times less risky than Kulicke. It trades about 0.07 of its potential returns per unit of risk. Kulicke and Soffa is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,373 in Kulicke and Soffa on September 2, 2024 and sell it today you would earn a total of 469.00 from holding Kulicke and Soffa or generate 10.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Axalta Coating Systems vs. Kulicke and Soffa
Performance |
| Timeline |
| Axalta Coating Systems |
| Kulicke and Soffa |
Axalta Coating and Kulicke Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axalta Coating and Kulicke
The main advantage of trading using opposite Axalta Coating and Kulicke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axalta Coating 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.| Axalta Coating vs. Linde plc Ordinary | Axalta Coating vs. Air Products and | Axalta Coating vs. Aquagold International | Axalta Coating vs. Thrivent High Yield |
| Kulicke vs. Ultra Clean Holdings | Kulicke vs. Ichor Holdings | Kulicke vs. Entegris | Kulicke vs. Amtech Systems |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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