Correlation Between Kulicke and Wave Systems

Can any of the company-specific risk be diversified away by investing in both Kulicke and Wave Systems 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 Wave Systems 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 Wave Systems Corp, you can compare the effects of market volatilities on Kulicke and Wave Systems 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 Wave Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kulicke and Wave Systems.

Diversification Opportunities for Kulicke and Wave Systems

0.0

Correlation Coefficient

Kulicke  Wave Systems

Pay attention - limited upside

The 3 months correlation between Kulicke and Wave is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kulicke and Soffa and Wave Systems Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wave Systems Corp 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 Wave Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wave Systems Corp has no effect on the direction of Kulicke i.e., Kulicke and Wave Systems go up and down completely randomly.

Pair Corralation between Kulicke and Wave Systems

If you would invest  4,145  in Kulicke and Soffa on January 30, 2024 and sell it today you would earn a total of  557.00  from holding Kulicke and Soffa or generate 13.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.81%
Values	Daily Returns

Kulicke and Soffa  vs.  Wave Systems Corp

Kulicke and Soffa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kulicke and Soffa has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's forward indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Wave Systems Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wave Systems Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Wave Systems is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kulicke and Wave Systems

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

The idea behind Kulicke and Soffa and Wave Systems Corp 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.