Correlation Between Amkor Technology and CHIBA BANK
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and CHIBA BANK 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 CHIBA BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and CHIBA BANK, you can compare the effects of market volatilities on Amkor Technology and CHIBA BANK 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 CHIBA BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and CHIBA BANK.
Diversification Opportunities for Amkor Technology and CHIBA BANK
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amkor and CHIBA is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and CHIBA BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHIBA 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 CHIBA BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHIBA BANK has no effect on the direction of Amkor Technology i.e., Amkor Technology and CHIBA BANK go up and down completely randomly.
Pair Corralation between Amkor Technology and CHIBA BANK
Assuming the 90 days horizon Amkor Technology is expected to generate 5.89 times less return on investment than CHIBA BANK. In addition to that, Amkor Technology is 1.09 times more volatile than CHIBA BANK. It trades about 0.04 of its total potential returns per unit of risk. CHIBA BANK is currently generating about 0.28 per unit of volatility. If you would invest 690.00 in CHIBA BANK on September 2, 2024 and sell it today you would earn a total of 90.00 from holding CHIBA BANK or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amkor Technology vs. CHIBA BANK
Performance |
| Timeline |
| Amkor Technology |
| CHIBA BANK |
Amkor Technology and CHIBA BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and CHIBA BANK
The main advantage of trading using opposite Amkor Technology and CHIBA BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, CHIBA BANK 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 CHIBA BANK will offset losses from the drop in CHIBA BANK's long position.The idea behind Amkor Technology and CHIBA 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.| CHIBA BANK vs. SIVERS SEMICONDUCTORS AB | CHIBA BANK vs. Darden Restaurants | CHIBA BANK vs. Reliance Steel Aluminum | CHIBA BANK 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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