Correlation Between Kulicke and SunLink Health

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

0.12

Correlation Coefficient

Kulicke  SunLink Health

Average diversification

The 3 months correlation between Kulicke and SunLink is 0.12. 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 under-perform the SunLink Health. But the stock apears to be less risky and, when comparing its historical volatility, Kulicke and Soffa is 1.95 times less risky than SunLink Health. The stock trades about 0.0 of its potential returns per unit of risk. The SunLink Health Systems is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  85.00  in SunLink Health Systems on September 9, 2024 and sell it today you would lose (5.00) from holding SunLink Health Systems or give up 5.88% of portfolio value over 90 days.

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

Kulicke and Soffa  vs.  SunLink Health Systems

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 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

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SunLink Health Systems are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, SunLink Health showed solid returns over the last few months and may actually be approaching a breakup point.

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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.