Correlation Between Super Micro and KULR Technology

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

By analyzing existing cross correlation between Super Micro Computer and KULR Technology Group, you can compare the effects of market volatilities on Super Micro and KULR Technology 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 Super Micro with a short position of KULR Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Super Micro and KULR Technology.

Diversification Opportunities for Super Micro and KULR Technology

-0.07

Correlation Coefficient

Super Micro  KULR Technology

Good diversification

The 3 months correlation between Super and KULR is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Super Micro Computer and KULR Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KULR Technology Group and Super Micro 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 Super Micro Computer are associated (or correlated) with KULR Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KULR Technology Group has no effect on the direction of Super Micro i.e., Super Micro and KULR Technology go up and down completely randomly.

Pair Corralation between Super Micro and KULR Technology

Given the investment horizon of 90 days Super Micro is expected to generate 3.24 times less return on investment than KULR Technology. But when comparing it to its historical volatility, Super Micro Computer is 1.9 times less risky than KULR Technology. It trades about 0.23 of its potential returns per unit of risk. KULR Technology Group is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest  35.00  in KULR Technology Group on September 19, 2024 and sell it today you would earn a total of  109.00  from holding KULR Technology Group or generate 311.43% return on investment over 90 days.

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

Super Micro Computer  vs.  KULR Technology Group

Super Micro Computer

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Super Micro Computer has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Super Micro is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

KULR Technology Group

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in KULR Technology Group are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak essential indicators, KULR Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Super Micro and KULR Technology

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

The idea behind Super Micro Computer and KULR Technology Group 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.