Correlation Between Target and Kulicke
Can any of the company-specific risk be diversified away by investing in both Target 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 Target and Kulicke into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Target and Kulicke and Soffa, you can compare the effects of market volatilities on Target 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 Target with a short position of Kulicke. Check out your portfolio center. Please also check ongoing floating volatility patterns of Target and Kulicke.
Diversification Opportunities for Target and Kulicke
Very good diversification
The 3 months correlation between Target and Kulicke is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Target 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 Target 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 Target 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 Target i.e., Target and Kulicke go up and down completely randomly.
Pair Corralation between Target and Kulicke
Considering the 90-day investment horizon Target is expected to under-perform the Kulicke. But the stock apears to be less risky and, when comparing its historical volatility, Target is 1.01 times less risky than Kulicke. The stock trades about -0.01 of its potential returns per unit of risk. The Kulicke and Soffa is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 4,868 in Kulicke and Soffa on January 25, 2024 and sell it today you would lose (251.00) from holding Kulicke and Soffa or give up 5.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Target vs. Kulicke and Soffa
Performance |
| Timeline |
| Target |
| Kulicke and Soffa |
Target and Kulicke Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Target and Kulicke
The main advantage of trading using opposite Target and Kulicke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Target 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.| Target vs. Big Lots | Target vs. Aquagold International | Target vs. Thrivent High Yield | Target vs. Morningstar Unconstrained Allocation |
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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