Correlation Between Kulicke and Lam Research
Can any of the company-specific risk be diversified away by investing in both Kulicke and Lam Research 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 Lam Research 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 Lam Research Corp, you can compare the effects of market volatilities on Kulicke and Lam Research 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 Lam Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kulicke and Lam Research.
Diversification Opportunities for Kulicke and Lam Research
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kulicke and Lam is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Kulicke and Soffa and Lam Research Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lam Research Corp 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 Lam Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lam Research Corp has no effect on the direction of Kulicke i.e., Kulicke and Lam Research go up and down completely randomly.
Pair Corralation between Kulicke and Lam Research
Given the investment horizon of 90 days Kulicke and Soffa is expected to generate 0.79 times more return on investment than Lam Research. However, Kulicke and Soffa is 1.27 times less risky than Lam Research. It trades about -0.02 of its potential returns per unit of risk. Lam Research Corp is currently generating about -0.02 per unit of risk. If you would invest 4,602 in Kulicke and Soffa on November 1, 2024 and sell it today you would lose (212.00) from holding Kulicke and Soffa or give up 4.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kulicke and Soffa vs. Lam Research Corp
Performance |
| Timeline |
| Kulicke and Soffa |
| Lam Research Corp |
Kulicke and Lam Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kulicke and Lam Research
The main advantage of trading using opposite Kulicke and Lam Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kulicke position performs unexpectedly, Lam Research 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 Lam Research will offset losses from the drop in Lam Research's long position.| Kulicke vs. Diodes Incorporated | Kulicke vs. Daqo New Energy | Kulicke vs. Micron Technology | Kulicke vs. MagnaChip Semiconductor |
| Lam Research vs. Diodes Incorporated | Lam Research vs. Daqo New Energy | Lam Research vs. Micron Technology | Lam Research vs. MagnaChip Semiconductor |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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