Correlation Between Arcadium Lithium and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both Arcadium Lithium and Amkor Technology 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 Arcadium Lithium and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arcadium Lithium plc and Amkor Technology, you can compare the effects of market volatilities on Arcadium Lithium and Amkor Technology 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 Arcadium Lithium with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arcadium Lithium and Amkor Technology.
Diversification Opportunities for Arcadium Lithium and Amkor Technology
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Arcadium and Amkor is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Arcadium Lithium plc and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and Arcadium Lithium 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 Arcadium Lithium plc are associated (or correlated) with Amkor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amkor Technology has no effect on the direction of Arcadium Lithium i.e., Arcadium Lithium and Amkor Technology go up and down completely randomly.
Pair Corralation between Arcadium Lithium and Amkor Technology
Given the investment horizon of 90 days Arcadium Lithium plc is expected to under-perform the Amkor Technology. In addition to that, Arcadium Lithium is 1.52 times more volatile than Amkor Technology. It trades about -0.02 of its total potential returns per unit of risk. Amkor Technology is currently generating about 0.02 per unit of volatility. If you would invest 2,617 in Amkor Technology on August 31, 2024 and sell it today you would earn a total of 27.00 from holding Amkor Technology or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arcadium Lithium plc vs. Amkor Technology
Performance |
| Timeline |
| Arcadium Lithium plc |
| Amkor Technology |
Arcadium Lithium and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arcadium Lithium and Amkor Technology
The main advantage of trading using opposite Arcadium Lithium and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arcadium Lithium position performs unexpectedly, Amkor Technology 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 Amkor Technology will offset losses from the drop in Amkor Technology's long position.| Arcadium Lithium vs. SNDL Inc | Arcadium Lithium vs. Stepan Company | Arcadium Lithium vs. Hudson Technologies | Arcadium Lithium vs. Treasury Wine Estates |
| Amkor Technology vs. Power Integrations | Amkor Technology vs. Diodes Incorporated | Amkor Technology vs. MACOM Technology Solutions | Amkor Technology vs. Cirrus Logic |
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 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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