Correlation Between Kulicke and Micron Technology
Can any of the company-specific risk be diversified away by investing in both Kulicke and Micron Technology 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 Micron Technology 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 Micron Technology, you can compare the effects of market volatilities on Kulicke and Micron Technology 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 Micron Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kulicke and Micron Technology.
Diversification Opportunities for Kulicke and Micron Technology
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kulicke and Micron is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Kulicke and Soffa and Micron Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Micron Technology 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 Micron Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Micron Technology has no effect on the direction of Kulicke i.e., Kulicke and Micron Technology go up and down completely randomly.
Pair Corralation between Kulicke and Micron Technology
Given the investment horizon of 90 days Kulicke and Soffa is expected to generate 0.78 times more return on investment than Micron Technology. However, Kulicke and Soffa is 1.28 times less risky than Micron Technology. It trades about 0.01 of its potential returns per unit of risk. Micron Technology is currently generating about -0.14 per unit of risk. If you would invest 4,744 in Kulicke and Soffa on August 30, 2024 and sell it today you would lose (3.00) from holding Kulicke and Soffa or give up 0.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kulicke and Soffa vs. Micron Technology
Performance |
| Timeline |
| Kulicke and Soffa |
| Micron Technology |
Kulicke and Micron Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kulicke and Micron Technology
The main advantage of trading using opposite Kulicke and Micron Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kulicke position performs unexpectedly, Micron Technology 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 Micron Technology will offset losses from the drop in Micron Technology's long position.| Kulicke vs. First Solar | Kulicke vs. Sunrun Inc | Kulicke vs. Canadian Solar | Kulicke vs. SolarEdge Technologies |
| Micron Technology vs. First Solar | Micron Technology vs. Sunrun Inc | Micron Technology vs. Canadian Solar | Micron Technology vs. SolarEdge Technologies |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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