Correlation Between Amkor Technology and Nippon Telegraph
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and Nippon Telegraph 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 Nippon Telegraph into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and Nippon Telegraph and, you can compare the effects of market volatilities on Amkor Technology and Nippon Telegraph 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 Nippon Telegraph. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and Nippon Telegraph.
Diversification Opportunities for Amkor Technology and Nippon Telegraph
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amkor and Nippon is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Nippon Telegraph and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nippon Telegraph 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 Nippon Telegraph. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nippon Telegraph has no effect on the direction of Amkor Technology i.e., Amkor Technology and Nippon Telegraph go up and down completely randomly.
Pair Corralation between Amkor Technology and Nippon Telegraph
Assuming the 90 days horizon Amkor Technology is expected to generate 2.19 times more return on investment than Nippon Telegraph. However, Amkor Technology is 2.19 times more volatile than Nippon Telegraph and. It trades about -0.09 of its potential returns per unit of risk. Nippon Telegraph and is currently generating about -0.22 per unit of risk. If you would invest 2,520 in Amkor Technology on October 28, 2024 and sell it today you would lose (72.00) from holding Amkor Technology or give up 2.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amkor Technology vs. Nippon Telegraph and
Performance |
| Timeline |
| Amkor Technology |
| Nippon Telegraph |
Amkor Technology and Nippon Telegraph Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and Nippon Telegraph
The main advantage of trading using opposite Amkor Technology and Nippon Telegraph positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, Nippon Telegraph 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 Nippon Telegraph will offset losses from the drop in Nippon Telegraph's long position.| Amkor Technology vs. NVIDIA | Amkor Technology vs. Taiwan Semiconductor Manufacturing | Amkor Technology vs. Broadcom | Amkor Technology vs. QUALCOMM Incorporated |
| Nippon Telegraph vs. Vulcan Materials | Nippon Telegraph vs. WILLIS LEASE FIN | Nippon Telegraph vs. ALBIS LEASING AG | Nippon Telegraph vs. Applied Materials |
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 Stocks Directory module to find actively traded stocks across global markets.
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