Correlation Between Amkor Technology and Tower Semiconductor
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and Tower Semiconductor 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 Tower Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and Tower Semiconductor, you can compare the effects of market volatilities on Amkor Technology and Tower Semiconductor 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 Tower Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and Tower Semiconductor.
Diversification Opportunities for Amkor Technology and Tower Semiconductor
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amkor and Tower is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Tower Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tower Semiconductor 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 Tower Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tower Semiconductor has no effect on the direction of Amkor Technology i.e., Amkor Technology and Tower Semiconductor go up and down completely randomly.
Pair Corralation between Amkor Technology and Tower Semiconductor
Assuming the 90 days horizon Amkor Technology is expected to generate 1.07 times less return on investment than Tower Semiconductor. In addition to that, Amkor Technology is 1.33 times more volatile than Tower Semiconductor. It trades about 0.02 of its total potential returns per unit of risk. Tower Semiconductor is currently generating about 0.03 per unit of volatility. If you would invest 4,000 in Tower Semiconductor on September 24, 2024 and sell it today you would earn a total of 796.00 from holding Tower Semiconductor or generate 19.9% 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. Tower Semiconductor
Performance |
| Timeline |
| Amkor Technology |
| Tower Semiconductor |
Amkor Technology and Tower Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and Tower Semiconductor
The main advantage of trading using opposite Amkor Technology and Tower Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, Tower Semiconductor 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 Tower Semiconductor will offset losses from the drop in Tower Semiconductor's long position.| Amkor Technology vs. NVIDIA | Amkor Technology vs. Taiwan Semiconductor Manufacturing | Amkor Technology vs. Broadcom | Amkor Technology vs. Texas Instruments Incorporated |
| Tower Semiconductor vs. CHINA EDUCATION GROUP | Tower Semiconductor vs. American Public Education | Tower Semiconductor vs. STORE ELECTRONIC | Tower Semiconductor vs. Adtalem Global Education |
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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