Correlation Between Kulicke and Nano Labs

Can any of the company-specific risk be diversified away by investing in both Kulicke and Nano Labs 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 Nano Labs 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 Nano Labs, you can compare the effects of market volatilities on Kulicke and Nano Labs 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 Nano Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kulicke and Nano Labs.

Diversification Opportunities for Kulicke and Nano Labs

0.4

Correlation Coefficient

Kulicke  Nano Labs

Very weak diversification

The 3 months correlation between Kulicke and Nano is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Kulicke and Soffa and Nano Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano Labs 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 Nano Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano Labs has no effect on the direction of Kulicke i.e., Kulicke and Nano Labs go up and down completely randomly.

Pair Corralation between Kulicke and Nano Labs

Given the investment horizon of 90 days Kulicke is expected to generate 23.16 times less return on investment than Nano Labs. But when comparing it to its historical volatility, Kulicke and Soffa is 10.93 times less risky than Nano Labs. It trades about 0.05 of its potential returns per unit of risk. Nano Labs is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  580.00  in Nano Labs on September 26, 2024 and sell it today you would earn a total of  319.00  from holding Nano Labs or generate 55.0% return on investment over 90 days.

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

Kulicke and Soffa  vs.  Nano Labs

Kulicke and Soffa

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kulicke and Soffa are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward indicators, Kulicke may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Nano Labs

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nano Labs are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Nano Labs sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kulicke and Nano Labs

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

The idea behind Kulicke and Soffa and Nano Labs 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.