Correlation Between Kulicke and LB Foster
Can any of the company-specific risk be diversified away by investing in both Kulicke and LB Foster 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 LB Foster 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 LB Foster, you can compare the effects of market volatilities on Kulicke and LB Foster 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 LB Foster. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kulicke and LB Foster.
Diversification Opportunities for Kulicke and LB Foster
Poor diversification
The 3 months correlation between Kulicke and FSTR is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kulicke and Soffa and LB Foster in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LB Foster 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 LB Foster. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LB Foster has no effect on the direction of Kulicke i.e., Kulicke and LB Foster go up and down completely randomly.
Pair Corralation between Kulicke and LB Foster
Given the investment horizon of 90 days Kulicke is expected to generate 7.65 times less return on investment than LB Foster. But when comparing it to its historical volatility, Kulicke and Soffa is 1.77 times less risky than LB Foster. It trades about 0.11 of its potential returns per unit of risk. LB Foster is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 1,962 in LB Foster on September 6, 2024 and sell it today you would earn a total of 963.00 from holding LB Foster or generate 49.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Kulicke and Soffa vs. LB Foster
Performance |
Timeline |
Kulicke and Soffa |
LB Foster |
Kulicke and LB Foster Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kulicke and LB Foster
The main advantage of trading using opposite Kulicke and LB Foster positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kulicke position performs unexpectedly, LB Foster 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 LB Foster will offset losses from the drop in LB Foster's long position.Kulicke vs. Ultra Clean Holdings | Kulicke vs. Ichor Holdings | Kulicke vs. Entegris | Kulicke vs. Amtech Systems |
LB Foster vs. Ayala | LB Foster vs. Steel Partners Holdings | LB Foster vs. Griffon | LB Foster vs. Matthews International |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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