Correlation Between Amkor Technology and GigaMedia
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and GigaMedia 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 GigaMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and GigaMedia, you can compare the effects of market volatilities on Amkor Technology and GigaMedia 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 GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and GigaMedia.
Diversification Opportunities for Amkor Technology and GigaMedia
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amkor and GigaMedia is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia 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 GigaMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GigaMedia has no effect on the direction of Amkor Technology i.e., Amkor Technology and GigaMedia go up and down completely randomly.
Pair Corralation between Amkor Technology and GigaMedia
Assuming the 90 days horizon Amkor Technology is expected to generate 3.84 times more return on investment than GigaMedia. However, Amkor Technology is 3.84 times more volatile than GigaMedia. It trades about 0.07 of its potential returns per unit of risk. GigaMedia is currently generating about -0.11 per unit of risk. If you would invest 2,379 in Amkor Technology on September 21, 2024 and sell it today you would earn a total of 69.00 from holding Amkor Technology or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amkor Technology vs. GigaMedia
Performance |
| Timeline |
| Amkor Technology |
| GigaMedia |
Amkor Technology and GigaMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and GigaMedia
The main advantage of trading using opposite Amkor Technology and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, GigaMedia 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 GigaMedia will offset losses from the drop in GigaMedia's long position.| Amkor Technology vs. Taiwan Semiconductor Manufacturing | Amkor Technology vs. Broadcom | Amkor Technology vs. Superior Plus Corp | Amkor Technology vs. Norsk Hydro ASA |
| GigaMedia vs. ASSOC BR FOODS | GigaMedia vs. TYSON FOODS A | GigaMedia vs. ORMAT TECHNOLOGIES | GigaMedia 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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