Correlation Between Kulicke and SunLink Health

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

Diversification Opportunities for Kulicke and SunLink Health

0.14
  Correlation Coefficient

Average diversification

The 3 months correlation between Kulicke and SunLink is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Kulicke and Soffa and SunLink Health Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunLink Health Systems 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 SunLink Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunLink Health Systems has no effect on the direction of Kulicke i.e., Kulicke and SunLink Health go up and down completely randomly.

Pair Corralation between Kulicke and SunLink Health

Given the investment horizon of 90 days Kulicke and Soffa is expected to generate 0.51 times more return on investment than SunLink Health. However, Kulicke and Soffa is 1.97 times less risky than SunLink Health. It trades about 0.18 of its potential returns per unit of risk. SunLink Health Systems is currently generating about 0.06 per unit of risk. If you would invest  3,838  in Kulicke and Soffa on September 6, 2024 and sell it today you would earn a total of  1,109  from holding Kulicke and Soffa or generate 28.9% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Kulicke and Soffa  vs.  SunLink Health Systems

 Performance 
       Timeline  
Kulicke and Soffa 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Kulicke and Soffa are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, Kulicke exhibited solid returns over the last few months and may actually be approaching a breakup point.
SunLink Health Systems 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in SunLink Health Systems are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, SunLink Health showed solid returns over the last few months and may actually be approaching a breakup point.

Kulicke and SunLink Health Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kulicke and SunLink Health

The main advantage of trading using opposite Kulicke and SunLink Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kulicke position performs unexpectedly, SunLink Health 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 SunLink Health will offset losses from the drop in SunLink Health's long position.
The idea behind Kulicke and Soffa and SunLink Health Systems 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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