Correlation Between Allient and Kulicke

Can any of the company-specific risk be diversified away by investing in both Allient 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 Allient and Kulicke into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Allient and Kulicke and Soffa, you can compare the effects of market volatilities on Allient 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 Allient with a short position of Kulicke. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allient and Kulicke.

Diversification Opportunities for Allient and Kulicke

0.61

Correlation Coefficient

Allient  Kulicke

Poor diversification

The 3 months correlation between Allient and Kulicke is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Allient 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 Allient 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 Allient 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 Allient i.e., Allient and Kulicke go up and down completely randomly.

Pair Corralation between Allient and Kulicke

Given the investment horizon of 90 days Allient is expected to generate 1.13 times more return on investment than Kulicke. However, Allient is 1.13 times more volatile than Kulicke and Soffa. It trades about 0.22 of its potential returns per unit of risk. Kulicke and Soffa is currently generating about 0.15 per unit of risk. If you would invest  1,919  in Allient on September 12, 2024 and sell it today you would earn a total of  816.00  from holding Allient or generate 42.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Allient  vs.  Kulicke and Soffa

Allient

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allient are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Allient unveiled solid returns over the last few months and may actually be approaching a breakup point.

Kulicke and Soffa

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kulicke and Soffa are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward indicators, Kulicke exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Allient and Kulicke

The main advantage of trading using opposite Allient and Kulicke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allient 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 Allient 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.