Correlation Between Amkor Technology and Hyundai
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and Hyundai 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 Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and Hyundai Motor, you can compare the effects of market volatilities on Amkor Technology and Hyundai 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 Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and Hyundai.
Diversification Opportunities for Amkor Technology and Hyundai
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amkor and Hyundai is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor 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 Hyundai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Motor has no effect on the direction of Amkor Technology i.e., Amkor Technology and Hyundai go up and down completely randomly.
Pair Corralation between Amkor Technology and Hyundai
Assuming the 90 days horizon Amkor Technology is expected to under-perform the Hyundai. In addition to that, Amkor Technology is 1.08 times more volatile than Hyundai Motor. It trades about -0.06 of its total potential returns per unit of risk. Hyundai Motor is currently generating about -0.04 per unit of volatility. If you would invest 5,660 in Hyundai Motor on August 30, 2024 and sell it today you would lose (260.00) from holding Hyundai Motor or give up 4.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.73% |
| Values | Daily Returns |
Amkor Technology vs. Hyundai Motor
Performance |
| Timeline |
| Amkor Technology |
| Hyundai Motor |
Amkor Technology and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and Hyundai
The main advantage of trading using opposite Amkor Technology and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, Hyundai 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 Hyundai will offset losses from the drop in Hyundai's long position.| Amkor Technology vs. PSI Software AG | Amkor Technology vs. AEGEAN AIRLINES | Amkor Technology vs. ATOSS SOFTWARE | Amkor Technology vs. AIR PRODCHEMICALS |
| Hyundai vs. PKSHA TECHNOLOGY INC | Hyundai vs. Singapore Reinsurance | Hyundai vs. Check Point Software | Hyundai 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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