Correlation Between Kulicke and Daqo New

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

Diversification Opportunities for Kulicke and Daqo New

0.18
  Correlation Coefficient

Average diversification

The 3 months correlation between Kulicke and Daqo New is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Kulicke And Soffa and Daqo New Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daqo New Energy 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 Daqo New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daqo New Energy has no effect on the direction of Kulicke i.e., Kulicke and Daqo New go up and down completely randomly.

Pair Corralation between Kulicke and Daqo New

Given the investment horizon of 90 days Kulicke is expected to generate 1.46 times less return on investment than Daqo New. But when comparing it to its historical volatility, Kulicke And Soffa is 1.76 times less risky than Daqo New. It trades about 0.05 of its potential returns per unit of risk. Daqo New Energy is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3,776  in Daqo New Energy on June 29, 2022 and sell it today you would earn a total of  1,362  from holding Daqo New Energy or generate 36.07% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Kulicke And Soffa  vs.  Daqo New Energy

 Performance (%) 
       Timeline  
Kulicke And Soffa 
Kulicke Performance
0 of 100
Over the last 90 days Kulicke And Soffa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Kulicke Price Channel

Daqo New Energy 
Daqo New Performance
0 of 100
Over the last 90 days Daqo New Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in October 2022. The recent disarray may also be a sign of long period up-swing for the firm insiders.

Daqo New Price Channel

Kulicke and Daqo New Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kulicke and Daqo New

The main advantage of trading using opposite Kulicke and Daqo New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kulicke position performs unexpectedly, Daqo New 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 Daqo New will offset losses from the drop in Daqo New's long position.
Kulicke vs. Sunrun Inc
The idea behind Kulicke And Soffa and Daqo New Energy 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.
Daqo New vs. Sunrun Inc
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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