Correlation Between Kulicke and Daqo New
Can any of the company-specific risk be diversified away by investing in both Kulicke and Daqo New 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 Daqo New 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 Daqo New Energy, you can compare the effects of market volatilities on Kulicke and Daqo New 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 Daqo New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kulicke and Daqo New.
Diversification Opportunities for Kulicke and Daqo New
Good diversification
The 3 months correlation between Kulicke and Daqo is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Kulicke and Soffa and Daqo New Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daqo New Energy 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 Daqo New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daqo New Energy has no effect on the direction of Kulicke i.e., Kulicke and Daqo New go up and down completely randomly.
Pair Corralation between Kulicke and Daqo New
Given the investment horizon of 90 days Kulicke and Soffa is expected to generate 0.6 times more return on investment than Daqo New. However, Kulicke and Soffa is 1.65 times less risky than Daqo New. It trades about -0.17 of its potential returns per unit of risk. Daqo New Energy is currently generating about -0.24 per unit of risk. If you would invest 4,732 in Kulicke and Soffa on November 4, 2024 and sell it today you would lose (297.00) from holding Kulicke and Soffa or give up 6.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kulicke and Soffa vs. Daqo New Energy
Performance |
| Timeline |
| Kulicke and Soffa |
| Daqo New Energy |
Kulicke and Daqo New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kulicke and Daqo New
The main advantage of trading using opposite Kulicke and Daqo New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kulicke position performs unexpectedly, Daqo New 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 Daqo New will offset losses from the drop in Daqo New's long position.| Kulicke vs. Ultra Clean Holdings | Kulicke vs. Ichor Holdings | Kulicke vs. Entegris | Kulicke vs. Amtech Systems |
| Daqo New vs. Axcelis Technologies | Daqo New vs. Kulicke and Soffa | Daqo New vs. Ultra Clean Holdings | Daqo New vs. Cohu Inc |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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