Correlation Between Amkor Technology and X Fab
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and X Fab 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 X Fab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and X Fab Silicon, you can compare the effects of market volatilities on Amkor Technology and X Fab 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 X Fab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and X Fab.
Diversification Opportunities for Amkor Technology and X Fab
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Amkor and XFB is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and X Fab Silicon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X Fab Silicon 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 X Fab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X Fab Silicon has no effect on the direction of Amkor Technology i.e., Amkor Technology and X Fab go up and down completely randomly.
Pair Corralation between Amkor Technology and X Fab
Assuming the 90 days horizon Amkor Technology is expected to under-perform the X Fab. But the stock apears to be less risky and, when comparing its historical volatility, Amkor Technology is 1.21 times less risky than X Fab. The stock trades about -0.11 of its potential returns per unit of risk. The X Fab Silicon is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 496.00 in X Fab Silicon on November 30, 2024 and sell it today you would lose (37.00) from holding X Fab Silicon or give up 7.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amkor Technology vs. X Fab Silicon
Performance |
| Timeline |
| Amkor Technology |
| X Fab Silicon |
Amkor Technology and X Fab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and X Fab
The main advantage of trading using opposite Amkor Technology and X Fab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, X Fab 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 X Fab will offset losses from the drop in X Fab's long position.| Amkor Technology vs. HK Electric Investments | Amkor Technology vs. MidCap Financial Investment | Amkor Technology vs. Aya Gold Silver | Amkor Technology vs. New Residential Investment |
| X Fab vs. CSSC Offshore Marine | X Fab vs. Entravision Communications | X Fab vs. GMO INTERNET | X Fab vs. United Internet AG |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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