Correlation Between BCE and Kulicke
Can any of the company-specific risk be diversified away by investing in both BCE 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 BCE and Kulicke into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCE Inc and Kulicke and Soffa, you can compare the effects of market volatilities on BCE 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 BCE with a short position of Kulicke. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCE and Kulicke.
Diversification Opportunities for BCE and Kulicke
Pay attention - limited upside
The 3 months correlation between BCE and Kulicke is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding BCE Inc 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 BCE 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 BCE Inc 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 BCE i.e., BCE and Kulicke go up and down completely randomly.
Pair Corralation between BCE and Kulicke
Considering the 90-day investment horizon BCE Inc is expected to under-perform the Kulicke. But the stock apears to be less risky and, when comparing its historical volatility, BCE Inc is 1.06 times less risky than Kulicke. The stock trades about -0.42 of its potential returns per unit of risk. The Kulicke and Soffa is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,613 in Kulicke and Soffa on August 29, 2024 and sell it today you would earn a total of 287.00 from holding Kulicke and Soffa or generate 6.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BCE Inc vs. Kulicke and Soffa
Performance |
| Timeline |
| BCE Inc |
| Kulicke and Soffa |
BCE and Kulicke Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCE and Kulicke
The main advantage of trading using opposite BCE and Kulicke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCE 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 BCE Inc 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.| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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