Correlation Between Snap and Kulicke
Can any of the company-specific risk be diversified away by investing in both Snap 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 Snap and Kulicke into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and Kulicke and Soffa, you can compare the effects of market volatilities on Snap 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 Snap with a short position of Kulicke. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and Kulicke.
Diversification Opportunities for Snap and Kulicke
Poor diversification
The 3 months correlation between Snap and Kulicke is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc 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 Snap 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 Snap Inc 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 Snap i.e., Snap and Kulicke go up and down completely randomly.
Pair Corralation between Snap and Kulicke
Given the investment horizon of 90 days Snap Inc is expected to generate 1.79 times more return on investment than Kulicke. However, Snap is 1.79 times more volatile than Kulicke and Soffa. It trades about 0.09 of its potential returns per unit of risk. Kulicke and Soffa is currently generating about 0.12 per unit of risk. If you would invest 1,071 in Snap Inc on August 27, 2024 and sell it today you would earn a total of 71.00 from holding Snap Inc or generate 6.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snap Inc vs. Kulicke and Soffa
Performance |
| Timeline |
| Snap Inc |
| Kulicke and Soffa |
Snap and Kulicke Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and Kulicke
The main advantage of trading using opposite Snap and Kulicke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap 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.The idea behind Snap Inc and Kulicke and Soffa pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Kulicke vs. Corporate Travel Management | Kulicke vs. INFORMATION SVC GRP | Kulicke vs. DOCDATA | Kulicke vs. Fidelity National Information |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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