Correlation Between Microsoft and Kulicke
Can any of the company-specific risk be diversified away by investing in both Microsoft and Kulicke 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 Microsoft and Kulicke into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Kulicke and Soffa, you can compare the effects of market volatilities on Microsoft and Kulicke 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 Microsoft with a short position of Kulicke. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Kulicke.
Diversification Opportunities for Microsoft and Kulicke
Significant diversification
The 3 months correlation between Microsoft and Kulicke is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Kulicke and Soffa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kulicke and Soffa and Microsoft 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 Microsoft are associated (or correlated) with Kulicke. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kulicke and Soffa has no effect on the direction of Microsoft i.e., Microsoft and Kulicke go up and down completely randomly.
Pair Corralation between Microsoft and Kulicke
Given the investment horizon of 90 days Microsoft is expected to under-perform the Kulicke. But the stock apears to be less risky and, when comparing its historical volatility, Microsoft is 1.3 times less risky than Kulicke. The stock trades about -0.05 of its potential returns per unit of risk. The Kulicke and Soffa is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 4,613 in Kulicke and Soffa on August 27, 2024 and sell it today you would earn a total of 304.00 from holding Kulicke and Soffa or generate 6.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Kulicke and Soffa
Performance |
| Timeline |
| Microsoft |
| Kulicke and Soffa |
Microsoft and Kulicke Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Kulicke
The main advantage of trading using opposite Microsoft and Kulicke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Kulicke 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 Kulicke will offset losses from the drop in Kulicke's long position.| Microsoft vs. GigaCloud Technology Class | Microsoft vs. Arqit Quantum | Microsoft vs. Cemtrex | Microsoft vs. Paysafe |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |