Correlation Between Advanced Micro and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both Advanced Micro 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 Advanced Micro and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Micro Devices and Amkor Technology, you can compare the effects of market volatilities on Advanced Micro 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 Advanced Micro with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and Amkor Technology.
Diversification Opportunities for Advanced Micro and Amkor Technology
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Advanced and Amkor is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and Advanced Micro 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 Advanced Micro Devices 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 Advanced Micro i.e., Advanced Micro and Amkor Technology go up and down completely randomly.
Pair Corralation between Advanced Micro and Amkor Technology
Considering the 90-day investment horizon Advanced Micro Devices is expected to generate 1.0 times more return on investment than Amkor Technology. However, Advanced Micro is 1.0 times more volatile than Amkor Technology. It trades about 0.03 of its potential returns per unit of risk. Amkor Technology is currently generating about 0.02 per unit of risk. If you would invest 10,822 in Advanced Micro Devices on September 12, 2024 and sell it today you would earn a total of 1,952 from holding Advanced Micro Devices or generate 18.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Micro Devices vs. Amkor Technology
Performance |
| Timeline |
| Advanced Micro Devices |
| Amkor Technology |
Advanced Micro and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Micro and Amkor Technology
The main advantage of trading using opposite Advanced Micro and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro 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.| Advanced Micro vs. NVIDIA | Advanced Micro vs. Taiwan Semiconductor Manufacturing | Advanced Micro vs. Micron Technology | Advanced Micro vs. Qualcomm Incorporated |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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