Correlation Between Amkor Technology and Eni SpA
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and Eni SpA 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 Eni SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and Eni SpA, you can compare the effects of market volatilities on Amkor Technology and Eni SpA 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 Eni SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and Eni SpA.
Diversification Opportunities for Amkor Technology and Eni SpA
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Amkor and Eni is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Eni SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eni SpA 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 Eni SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eni SpA has no effect on the direction of Amkor Technology i.e., Amkor Technology and Eni SpA go up and down completely randomly.
Pair Corralation between Amkor Technology and Eni SpA
Assuming the 90 days horizon Amkor Technology is expected to generate 2.17 times more return on investment than Eni SpA. However, Amkor Technology is 2.17 times more volatile than Eni SpA. It trades about -0.03 of its potential returns per unit of risk. Eni SpA is currently generating about -0.13 per unit of risk. If you would invest 2,533 in Amkor Technology on September 12, 2024 and sell it today you would lose (54.00) from holding Amkor Technology or give up 2.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amkor Technology vs. Eni SpA
Performance |
| Timeline |
| Amkor Technology |
| Eni SpA |
Amkor Technology and Eni SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and Eni SpA
The main advantage of trading using opposite Amkor Technology and Eni SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, Eni SpA 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 Eni SpA will offset losses from the drop in Eni SpA's long position.| Amkor Technology vs. Taiwan Semiconductor Manufacturing | Amkor Technology vs. Broadcom | Amkor Technology vs. Superior Plus Corp | Amkor Technology vs. SIVERS SEMICONDUCTORS AB |
| Eni SpA vs. Zijin Mining Group | Eni SpA vs. GRIFFIN MINING LTD | Eni SpA vs. Microchip Technology Incorporated | Eni SpA vs. Amkor Technology |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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