Correlation Between Kulicke and Monolithic Power
Can any of the company-specific risk be diversified away by investing in both Kulicke and Monolithic Power 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 Monolithic Power 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 Monolithic Power Systems, you can compare the effects of market volatilities on Kulicke and Monolithic Power 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 Monolithic Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kulicke and Monolithic Power.
Diversification Opportunities for Kulicke and Monolithic Power
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kulicke and Monolithic is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Kulicke and Soffa and Monolithic Power Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monolithic Power Systems 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 Monolithic Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monolithic Power Systems has no effect on the direction of Kulicke i.e., Kulicke and Monolithic Power go up and down completely randomly.
Pair Corralation between Kulicke and Monolithic Power
Given the investment horizon of 90 days Kulicke and Soffa is expected to generate 0.61 times more return on investment than Monolithic Power. However, Kulicke and Soffa is 1.65 times less risky than Monolithic Power. It trades about 0.12 of its potential returns per unit of risk. Monolithic Power Systems is currently generating about -0.15 per unit of risk. If you would invest 4,032 in Kulicke and Soffa on August 31, 2024 and sell it today you would earn a total of 709.00 from holding Kulicke and Soffa or generate 17.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kulicke and Soffa vs. Monolithic Power Systems
Performance |
| Timeline |
| Kulicke and Soffa |
| Monolithic Power Systems |
Kulicke and Monolithic Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kulicke and Monolithic Power
The main advantage of trading using opposite Kulicke and Monolithic Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kulicke position performs unexpectedly, Monolithic Power 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 Monolithic Power will offset losses from the drop in Monolithic Power's long position.| Kulicke vs. Ultra Clean Holdings | Kulicke vs. Ichor Holdings | Kulicke vs. Entegris | Kulicke vs. Amtech Systems |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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