Correlation Between Vishay Intertechnology and Kulicke

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

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

Diversification Opportunities for Vishay Intertechnology and Kulicke

-0.29

Correlation Coefficient

Vishay Intertechnology  Kulicke

Very good diversification

The 3 months correlation between Vishay and Kulicke is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Vishay Intertechnology 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 Vishay Intertechnology 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 Vishay Intertechnology 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 Vishay Intertechnology i.e., Vishay Intertechnology and Kulicke go up and down completely randomly.

Pair Corralation between Vishay Intertechnology and Kulicke

Considering the 90-day investment horizon Vishay Intertechnology is expected to generate 77.73 times less return on investment than Kulicke. In addition to that, Vishay Intertechnology is 1.03 times more volatile than Kulicke and Soffa. It trades about 0.0 of its total potential returns per unit of risk. Kulicke and Soffa is currently generating about 0.17 per unit of volatility. If you would invest  3,958  in Kulicke and Soffa on September 5, 2024 and sell it today you would earn a total of  1,078  from holding Kulicke and Soffa or generate 27.24% return on investment over 90 days.

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

Vishay Intertechnology  vs.  Kulicke and Soffa

Vishay Intertechnology

Risk-Adjusted Performance

0 of 100

Very Weak

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

Kulicke and Soffa

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kulicke and Soffa are ranked lower than 13 (%) 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 Vishay Intertechnology and Kulicke

The main advantage of trading using opposite Vishay Intertechnology and Kulicke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vishay Intertechnology 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 Vishay Intertechnology 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 CEOs Directory module to screen CEOs from public companies around the world.