Correlation Between Amkor Technology and Addtech AB
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and Addtech AB 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 Addtech AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and Addtech AB, you can compare the effects of market volatilities on Amkor Technology and Addtech AB 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 Addtech AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and Addtech AB.
Diversification Opportunities for Amkor Technology and Addtech AB
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Amkor and Addtech is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Addtech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addtech AB 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 Addtech AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addtech AB has no effect on the direction of Amkor Technology i.e., Amkor Technology and Addtech AB go up and down completely randomly.
Pair Corralation between Amkor Technology and Addtech AB
Assuming the 90 days horizon Amkor Technology is expected to generate 1.68 times more return on investment than Addtech AB. However, Amkor Technology is 1.68 times more volatile than Addtech AB. It trades about 0.11 of its potential returns per unit of risk. Addtech AB is currently generating about -0.08 per unit of risk. If you would invest 2,479 in Amkor Technology on October 10, 2024 and sell it today you would earn a total of 82.00 from holding Amkor Technology or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amkor Technology vs. Addtech AB
Performance |
| Timeline |
| Amkor Technology |
| Addtech AB |
Amkor Technology and Addtech AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and Addtech AB
The main advantage of trading using opposite Amkor Technology and Addtech AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, Addtech AB 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 Addtech AB will offset losses from the drop in Addtech AB's long position.| Amkor Technology vs. ALGOMA STEEL GROUP | Amkor Technology vs. PennantPark Investment | Amkor Technology vs. Japan Asia Investment | Amkor Technology vs. SLR Investment Corp |
| Addtech AB vs. GameStop Corp | Addtech AB vs. Marie Brizard Wine | Addtech AB vs. PENN NATL GAMING | Addtech AB vs. OURGAME INTHOLDL 00005 |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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