Correlation Between Amkor Technology and CDN IMPERIAL
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and CDN IMPERIAL 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 CDN IMPERIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and CDN IMPERIAL BANK, you can compare the effects of market volatilities on Amkor Technology and CDN IMPERIAL 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 CDN IMPERIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and CDN IMPERIAL.
Diversification Opportunities for Amkor Technology and CDN IMPERIAL
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amkor and CDN is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and CDN IMPERIAL BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDN IMPERIAL BANK 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 CDN IMPERIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDN IMPERIAL BANK has no effect on the direction of Amkor Technology i.e., Amkor Technology and CDN IMPERIAL go up and down completely randomly.
Pair Corralation between Amkor Technology and CDN IMPERIAL
Assuming the 90 days horizon Amkor Technology is expected to generate 2.48 times less return on investment than CDN IMPERIAL. In addition to that, Amkor Technology is 2.66 times more volatile than CDN IMPERIAL BANK. It trades about 0.04 of its total potential returns per unit of risk. CDN IMPERIAL BANK is currently generating about 0.29 per unit of volatility. If you would invest 5,805 in CDN IMPERIAL BANK on September 2, 2024 and sell it today you would earn a total of 314.00 from holding CDN IMPERIAL BANK or generate 5.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amkor Technology vs. CDN IMPERIAL BANK
Performance |
| Timeline |
| Amkor Technology |
| CDN IMPERIAL BANK |
Amkor Technology and CDN IMPERIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and CDN IMPERIAL
The main advantage of trading using opposite Amkor Technology and CDN IMPERIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, CDN IMPERIAL 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 CDN IMPERIAL will offset losses from the drop in CDN IMPERIAL's long position.The idea behind Amkor Technology and CDN IMPERIAL BANK pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| CDN IMPERIAL vs. SIVERS SEMICONDUCTORS AB | CDN IMPERIAL vs. Darden Restaurants | CDN IMPERIAL vs. Reliance Steel Aluminum | CDN IMPERIAL vs. Q2M Managementberatung AG |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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