Correlation Between TE Connectivity and KULR Technology
Can any of the company-specific risk be diversified away by investing in both TE Connectivity 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 TE Connectivity and KULR Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TE Connectivity and KULR Technology Group, you can compare the effects of market volatilities on TE Connectivity 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 TE Connectivity with a short position of KULR Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of TE Connectivity and KULR Technology.
Diversification Opportunities for TE Connectivity and KULR Technology
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TEL and KULR is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding TE Connectivity 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 TE Connectivity 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 TE Connectivity 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 TE Connectivity i.e., TE Connectivity and KULR Technology go up and down completely randomly.
Pair Corralation between TE Connectivity and KULR Technology
Considering the 90-day investment horizon TE Connectivity is expected to under-perform the KULR Technology. But the stock apears to be less risky and, when comparing its historical volatility, TE Connectivity is 18.72 times less risky than KULR Technology. The stock trades about -0.29 of its potential returns per unit of risk. The KULR Technology Group is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 79.00 in KULR Technology Group on September 25, 2024 and sell it today you would earn a total of 216.00 from holding KULR Technology Group or generate 273.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
TE Connectivity vs. KULR Technology Group
Performance |
Timeline |
TE Connectivity |
KULR Technology Group |
TE Connectivity and KULR Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TE Connectivity and KULR Technology
The main advantage of trading using opposite TE Connectivity and KULR Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TE Connectivity 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.TE Connectivity vs. Littelfuse | TE Connectivity vs. Fabrinet | TE Connectivity vs. Jabil Circuit | TE Connectivity vs. Sanmina |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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