Correlation Between Kulicke and CTS
Can any of the company-specific risk be diversified away by investing in both Kulicke and CTS 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 CTS 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 CTS Corporation, you can compare the effects of market volatilities on Kulicke and CTS 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 CTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kulicke and CTS.
Diversification Opportunities for Kulicke and CTS
Very poor diversification
The 3 months correlation between Kulicke and CTS is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Kulicke and Soffa and CTS Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTS Corporation 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 CTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTS Corporation has no effect on the direction of Kulicke i.e., Kulicke and CTS go up and down completely randomly.
Pair Corralation between Kulicke and CTS
Given the investment horizon of 90 days Kulicke is expected to generate 8.51 times less return on investment than CTS. In addition to that, Kulicke is 1.1 times more volatile than CTS Corporation. It trades about 0.0 of its total potential returns per unit of risk. CTS Corporation is currently generating about 0.02 per unit of volatility. If you would invest 4,667 in CTS Corporation on October 13, 2024 and sell it today you would earn a total of 323.00 from holding CTS Corporation or generate 6.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kulicke and Soffa vs. CTS Corp.
Performance |
| Timeline |
| Kulicke and Soffa |
| CTS Corporation |
Kulicke and CTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kulicke and CTS
The main advantage of trading using opposite Kulicke and CTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kulicke position performs unexpectedly, CTS 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 CTS will offset losses from the drop in CTS's long position.| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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