Correlation Between Amkor Technology and Advanced Drainage
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and Advanced Drainage 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 Amkor Technology and Advanced Drainage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and Advanced Drainage Systems, you can compare the effects of market volatilities on Amkor Technology and Advanced Drainage 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 Amkor Technology with a short position of Advanced Drainage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and Advanced Drainage.
Diversification Opportunities for Amkor Technology and Advanced Drainage
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Amkor and Advanced is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Advanced Drainage Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Drainage Systems and Amkor Technology 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 Amkor Technology are associated (or correlated) with Advanced Drainage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Drainage Systems has no effect on the direction of Amkor Technology i.e., Amkor Technology and Advanced Drainage go up and down completely randomly.
Pair Corralation between Amkor Technology and Advanced Drainage
Assuming the 90 days horizon Amkor Technology is expected to under-perform the Advanced Drainage. But the stock apears to be less risky and, when comparing its historical volatility, Amkor Technology is 1.33 times less risky than Advanced Drainage. The stock trades about -0.13 of its potential returns per unit of risk. The Advanced Drainage Systems is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 13,770 in Advanced Drainage Systems on August 29, 2024 and sell it today you would lose (1,230) from holding Advanced Drainage Systems or give up 8.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Amkor Technology vs. Advanced Drainage Systems
Performance |
| Timeline |
| Amkor Technology |
| Advanced Drainage Systems |
Amkor Technology and Advanced Drainage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and Advanced Drainage
The main advantage of trading using opposite Amkor Technology and Advanced Drainage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, Advanced Drainage 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 Advanced Drainage will offset losses from the drop in Advanced Drainage's long position.| Amkor Technology vs. NVIDIA | Amkor Technology vs. Texas Instruments Incorporated | Amkor Technology vs. Advanced Micro Devices | Amkor Technology vs. Advanced Micro Devices |
| Advanced Drainage vs. Bridgestone | Advanced Drainage vs. The Goodyear Tire | Advanced Drainage vs. Sumitomo Rubber Industries | Advanced Drainage vs. Zeon Corporation |
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.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |