Correlation Between NXP Semiconductors and Kulicke
Can any of the company-specific risk be diversified away by investing in both NXP Semiconductors 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 NXP Semiconductors and Kulicke into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NXP Semiconductors NV and Kulicke and Soffa, you can compare the effects of market volatilities on NXP Semiconductors 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 NXP Semiconductors with a short position of Kulicke. Check out your portfolio center. Please also check ongoing floating volatility patterns of NXP Semiconductors and Kulicke.
Diversification Opportunities for NXP Semiconductors and Kulicke
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between NXP and Kulicke is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding NXP Semiconductors NV 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 NXP Semiconductors 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 NXP Semiconductors NV 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 NXP Semiconductors i.e., NXP Semiconductors and Kulicke go up and down completely randomly.
Pair Corralation between NXP Semiconductors and Kulicke
Given the investment horizon of 90 days NXP Semiconductors NV is expected to under-perform the Kulicke. But the stock apears to be less risky and, when comparing its historical volatility, NXP Semiconductors NV is 1.05 times less risky than Kulicke. The stock trades about -0.07 of its potential returns per unit of risk. The Kulicke and Soffa is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 4,592 in Kulicke and Soffa on September 3, 2024 and sell it today you would earn a total of 250.00 from holding Kulicke and Soffa or generate 5.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NXP Semiconductors NV vs. Kulicke and Soffa
Performance |
| Timeline |
| NXP Semiconductors |
| Kulicke and Soffa |
NXP Semiconductors and Kulicke Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NXP Semiconductors and Kulicke
The main advantage of trading using opposite NXP Semiconductors and Kulicke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NXP Semiconductors 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.| NXP Semiconductors vs. Analog Devices | NXP Semiconductors vs. Qualcomm Incorporated | NXP Semiconductors vs. Broadcom | NXP Semiconductors vs. Microchip Technology |
| Kulicke vs. Power Integrations | Kulicke vs. Diodes Incorporated | Kulicke vs. MACOM Technology Solutions | Kulicke vs. Cirrus Logic |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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