Correlation Between Kulicke and BCE
Can any of the company-specific risk be diversified away by investing in both Kulicke and BCE 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 Kulicke and BCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kulicke and Soffa and BCE Inc, you can compare the effects of market volatilities on Kulicke and BCE 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 Kulicke with a short position of BCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kulicke and BCE.
Diversification Opportunities for Kulicke and BCE
Very weak diversification
The 3 months correlation between Kulicke and BCE is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Kulicke and Soffa and BCE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCE Inc and Kulicke 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 Kulicke and Soffa are associated (or correlated) with BCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCE Inc has no effect on the direction of Kulicke i.e., Kulicke and BCE go up and down completely randomly.
Pair Corralation between Kulicke and BCE
Given the investment horizon of 90 days Kulicke and Soffa is expected to under-perform the BCE. But the stock apears to be less risky and, when comparing its historical volatility, Kulicke and Soffa is 1.12 times less risky than BCE. The stock trades about -0.21 of its potential returns per unit of risk. The BCE Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,339 in BCE Inc on November 22, 2024 and sell it today you would earn a total of 3.00 from holding BCE Inc or generate 0.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kulicke and Soffa vs. BCE Inc
Performance |
| Timeline |
| Kulicke and Soffa |
| BCE Inc |
Kulicke and BCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kulicke and BCE
The main advantage of trading using opposite Kulicke and BCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kulicke position performs unexpectedly, BCE 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 BCE will offset losses from the drop in BCE's long position.| Kulicke vs. Ultra Clean Holdings | Kulicke vs. Ichor Holdings | Kulicke vs. Entegris | Kulicke vs. Amtech Systems |
| BCE vs. Rogers Communications | BCE vs. America Movil SAB | BCE vs. Telus Corp | BCE vs. Telefonica Brasil SA |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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