Correlation Between Amkor Technology and Brown Forman
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and Brown Forman 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 Brown Forman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and Brown Forman, you can compare the effects of market volatilities on Amkor Technology and Brown Forman 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 Brown Forman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and Brown Forman.
Diversification Opportunities for Amkor Technology and Brown Forman
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amkor and Brown is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Brown Forman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brown Forman 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 Brown Forman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brown Forman has no effect on the direction of Amkor Technology i.e., Amkor Technology and Brown Forman go up and down completely randomly.
Pair Corralation between Amkor Technology and Brown Forman
Assuming the 90 days horizon Amkor Technology is expected to generate 1.44 times more return on investment than Brown Forman. However, Amkor Technology is 1.44 times more volatile than Brown Forman. It trades about -0.02 of its potential returns per unit of risk. Brown Forman is currently generating about -0.24 per unit of risk. If you would invest 2,491 in Amkor Technology on August 31, 2024 and sell it today you would lose (36.00) from holding Amkor Technology or give up 1.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Amkor Technology vs. Brown Forman
Performance |
| Timeline |
| Amkor Technology |
| Brown Forman |
Amkor Technology and Brown Forman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and Brown Forman
The main advantage of trading using opposite Amkor Technology and Brown Forman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, Brown Forman 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 Brown Forman will offset losses from the drop in Brown Forman's long position.| Amkor Technology vs. NVIDIA | Amkor Technology vs. Taiwan Semiconductor Manufacturing | Amkor Technology vs. Intel |
| Brown Forman vs. CN MODERN DAIRY | Brown Forman vs. Amkor Technology | Brown Forman vs. TYSON FOODS A | Brown Forman vs. Vishay Intertechnology |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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