Correlation Between Sea and Kulicke
Can any of the company-specific risk be diversified away by investing in both Sea 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 Sea and Kulicke into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sea and Kulicke and Soffa, you can compare the effects of market volatilities on Sea 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 Sea with a short position of Kulicke. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea and Kulicke.
Diversification Opportunities for Sea and Kulicke
Very poor diversification
The 3 months correlation between Sea and Kulicke is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Sea 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 Sea 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 Sea 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 Sea i.e., Sea and Kulicke go up and down completely randomly.
Pair Corralation between Sea and Kulicke
Allowing for the 90-day total investment horizon Sea is expected to generate 0.97 times more return on investment than Kulicke. However, Sea is 1.03 times less risky than Kulicke. It trades about 0.29 of its potential returns per unit of risk. Kulicke and Soffa is currently generating about 0.16 per unit of risk. If you would invest 7,691 in Sea on September 8, 2024 and sell it today you would earn a total of 3,934 from holding Sea or generate 51.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Sea vs. Kulicke and Soffa
Performance |
Timeline |
Sea |
Kulicke and Soffa |
Sea and Kulicke Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sea and Kulicke
The main advantage of trading using opposite Sea and Kulicke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea 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.Sea vs. Atari SA | Sea vs. Victory Square Technologies | Sea vs. Motorsport Gaming Us | Sea vs. Alpha Esports Tech |
Kulicke vs. Ultra Clean Holdings | Kulicke vs. Ichor Holdings | Kulicke vs. Entegris | Kulicke vs. Amtech Systems |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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