Correlation Between Kulicke and Lowes Companies
Can any of the company-specific risk be diversified away by investing in both Kulicke and Lowes Companies 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 Kulicke and Lowes Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kulicke and Soffa and Lowes Companies, you can compare the effects of market volatilities on Kulicke and Lowes Companies 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 Kulicke with a short position of Lowes Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kulicke and Lowes Companies.
Diversification Opportunities for Kulicke and Lowes Companies
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kulicke and Lowes is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Kulicke and Soffa and Lowes Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lowes Companies and Kulicke 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 Kulicke and Soffa are associated (or correlated) with Lowes Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lowes Companies has no effect on the direction of Kulicke i.e., Kulicke and Lowes Companies go up and down completely randomly.
Pair Corralation between Kulicke and Lowes Companies
Given the investment horizon of 90 days Kulicke is expected to generate 1.37 times less return on investment than Lowes Companies. In addition to that, Kulicke is 1.48 times more volatile than Lowes Companies. It trades about 0.02 of its total potential returns per unit of risk. Lowes Companies is currently generating about 0.04 per unit of volatility. If you would invest 19,659 in Lowes Companies on January 20, 2024 and sell it today you would earn a total of 3,220 from holding Lowes Companies or generate 16.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.7% |
| Values | Daily Returns |
Kulicke and Soffa vs. Lowes Companies
Performance |
| Timeline |
| Kulicke and Soffa |
| Lowes Companies |
Kulicke and Lowes Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kulicke and Lowes Companies
The main advantage of trading using opposite Kulicke and Lowes Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kulicke position performs unexpectedly, Lowes Companies 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 Lowes Companies will offset losses from the drop in Lowes Companies' long position.| Kulicke vs. Ultra Clean Holdings | Kulicke vs. Ichor Holdings | Kulicke vs. Entegris | Kulicke vs. Amtech Systems |
| Lowes Companies vs. Arhaus Inc | Lowes Companies vs. Haverty Furniture Companies | Lowes Companies vs. Kirklands | Lowes Companies vs. Live Ventures |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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