Correlation Between SemiLEDS and Kulicke

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

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

Diversification Opportunities for SemiLEDS and Kulicke

0.16

Correlation Coefficient

SemiLEDS  Kulicke

Average diversification

The 3 months correlation between SemiLEDS and Kulicke is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding SemiLEDS and Kulicke and Soffa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kulicke and Soffa and SemiLEDS 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 SemiLEDS are associated (or correlated) with Kulicke. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kulicke and Soffa has no effect on the direction of SemiLEDS i.e., SemiLEDS and Kulicke go up and down completely randomly.

Pair Corralation between SemiLEDS and Kulicke

Given the investment horizon of 90 days SemiLEDS is expected to generate 2.71 times more return on investment than Kulicke. However, SemiLEDS is 2.71 times more volatile than Kulicke and Soffa. It trades about 0.06 of its potential returns per unit of risk. Kulicke and Soffa is currently generating about 0.14 per unit of risk. If you would invest  130.00  in SemiLEDS on September 17, 2024 and sell it today you would earn a total of  18.00  from holding SemiLEDS or generate 13.85% return on investment over 90 days.

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

SemiLEDS  vs.  Kulicke and Soffa

SemiLEDS

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SemiLEDS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, SemiLEDS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Kulicke and Soffa

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kulicke and Soffa are ranked lower than 10 (%) 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.

Pair Trading with SemiLEDS and Kulicke

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

The idea behind SemiLEDS and Kulicke and Soffa 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.