Correlation Between Amkor Technology and NVIDIA
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and NVIDIA 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 NVIDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and NVIDIA, you can compare the effects of market volatilities on Amkor Technology and NVIDIA 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 NVIDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and NVIDIA.
Diversification Opportunities for Amkor Technology and NVIDIA
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amkor and NVIDIA is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and NVIDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NVIDIA 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 NVIDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NVIDIA has no effect on the direction of Amkor Technology i.e., Amkor Technology and NVIDIA go up and down completely randomly.
Pair Corralation between Amkor Technology and NVIDIA
Assuming the 90 days horizon Amkor Technology is expected to under-perform the NVIDIA. But the stock apears to be less risky and, when comparing its historical volatility, Amkor Technology is 1.03 times less risky than NVIDIA. The stock trades about -0.11 of its potential returns per unit of risk. The NVIDIA is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 12,990 in NVIDIA on August 28, 2024 and sell it today you would earn a total of 650.00 from holding NVIDIA or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amkor Technology vs. NVIDIA
Performance |
| Timeline |
| Amkor Technology |
| NVIDIA |
Amkor Technology and NVIDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and NVIDIA
The main advantage of trading using opposite Amkor Technology and NVIDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, NVIDIA 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 NVIDIA will offset losses from the drop in NVIDIA's long position.| Amkor Technology vs. NVIDIA | Amkor Technology vs. NVIDIA | Amkor Technology vs. QUALCOMM Incorporated | Amkor Technology vs. Intel |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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