Correlation Between Kulicke and American Rebel

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

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

Diversification Opportunities for Kulicke and American Rebel

-0.3

Correlation Coefficient

Kulicke  American Rebel

Very good diversification

The 3 months correlation between Kulicke and American is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Kulicke and Soffa and American Rebel Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Rebel Holdings and Kulicke 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 Kulicke and Soffa are associated (or correlated) with American Rebel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Rebel Holdings has no effect on the direction of Kulicke i.e., Kulicke and American Rebel go up and down completely randomly.

Pair Corralation between Kulicke and American Rebel

Given the investment horizon of 90 days Kulicke is expected to generate 3.42 times less return on investment than American Rebel. But when comparing it to its historical volatility, Kulicke and Soffa is 7.78 times less risky than American Rebel. It trades about 0.15 of its potential returns per unit of risk. American Rebel Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1.27  in American Rebel Holdings on September 13, 2024 and sell it today you would lose (0.27) from holding American Rebel Holdings or give up 21.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.48%
Values	Daily Returns

Kulicke and Soffa  vs.  American Rebel Holdings

Kulicke and Soffa

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kulicke and Soffa are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating forward indicators, Kulicke exhibited solid returns over the last few months and may actually be approaching a breakup point.

American Rebel Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in American Rebel Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent fundamental drivers, American Rebel showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kulicke and American Rebel

The main advantage of trading using opposite Kulicke and American Rebel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kulicke position performs unexpectedly, American Rebel 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 American Rebel will offset losses from the drop in American Rebel's long position.

The idea behind Kulicke and Soffa and American Rebel Holdings 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.