Correlation Between KULR Technology and Richardson Electronics
Can any of the company-specific risk be diversified away by investing in both KULR Technology and Richardson Electronics 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 KULR Technology and Richardson Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KULR Technology Group and Richardson Electronics, you can compare the effects of market volatilities on KULR Technology and Richardson Electronics 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 KULR Technology with a short position of Richardson Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of KULR Technology and Richardson Electronics.
Diversification Opportunities for KULR Technology and Richardson Electronics
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KULR and Richardson is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding KULR Technology Group and Richardson Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Richardson Electronics and KULR Technology 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 KULR Technology Group are associated (or correlated) with Richardson Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Richardson Electronics has no effect on the direction of KULR Technology i.e., KULR Technology and Richardson Electronics go up and down completely randomly.
Pair Corralation between KULR Technology and Richardson Electronics
Given the investment horizon of 90 days KULR Technology Group is expected to generate 5.68 times more return on investment than Richardson Electronics. However, KULR Technology is 5.68 times more volatile than Richardson Electronics. It trades about 0.21 of its potential returns per unit of risk. Richardson Electronics is currently generating about 0.09 per unit of risk. If you would invest 29.00 in KULR Technology Group on August 23, 2024 and sell it today you would earn a total of 13.00 from holding KULR Technology Group or generate 44.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KULR Technology Group vs. Richardson Electronics
Performance |
| Timeline |
| KULR Technology Group |
| Richardson Electronics |
KULR Technology and Richardson Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KULR Technology and Richardson Electronics
The main advantage of trading using opposite KULR Technology and Richardson Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KULR Technology position performs unexpectedly, Richardson Electronics 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 Richardson Electronics will offset losses from the drop in Richardson Electronics' long position.| KULR Technology vs. Richardson Electronics | KULR Technology vs. Interlink Electronics | KULR Technology vs. SigmaTron International | KULR Technology vs. Maris Tech |
| Richardson Electronics vs. Bel Fuse A | Richardson Electronics vs. LSI Industries | Richardson Electronics vs. Benchmark Electronics | Richardson Electronics vs. Plexus Corp |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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