Correlation Between Amkor Technology and TC Energy
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and TC Energy 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 TC Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and TC Energy, you can compare the effects of market volatilities on Amkor Technology and TC Energy 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 TC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and TC Energy.
Diversification Opportunities for Amkor Technology and TC Energy
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amkor and TRS is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and TC Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TC Energy 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 TC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TC Energy has no effect on the direction of Amkor Technology i.e., Amkor Technology and TC Energy go up and down completely randomly.
Pair Corralation between Amkor Technology and TC Energy
Assuming the 90 days horizon Amkor Technology is expected to generate 6.53 times less return on investment than TC Energy. In addition to that, Amkor Technology is 1.83 times more volatile than TC Energy. It trades about 0.02 of its total potential returns per unit of risk. TC Energy is currently generating about 0.25 per unit of volatility. If you would invest 4,263 in TC Energy on September 1, 2024 and sell it today you would earn a total of 310.00 from holding TC Energy or generate 7.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Amkor Technology vs. TC Energy
Performance |
| Timeline |
| Amkor Technology |
| TC Energy |
Amkor Technology and TC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and TC Energy
The main advantage of trading using opposite Amkor Technology and TC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, TC Energy 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 TC Energy will offset losses from the drop in TC Energy's long position.The idea behind Amkor Technology and TC Energy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| TC Energy vs. DICKER DATA LTD | TC Energy vs. Hyrican Informationssysteme Aktiengesellschaft | TC Energy vs. Zijin Mining Group | TC Energy 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 Stocks Directory module to find actively traded stocks across global markets.
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