Correlation Between Amkor Technology and Analog Devices
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and Analog Devices 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 Analog Devices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and Analog Devices, you can compare the effects of market volatilities on Amkor Technology and Analog Devices 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 Analog Devices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and Analog Devices.
Diversification Opportunities for Amkor Technology and Analog Devices
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amkor and Analog is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Analog Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analog Devices 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 Analog Devices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analog Devices has no effect on the direction of Amkor Technology i.e., Amkor Technology and Analog Devices go up and down completely randomly.
Pair Corralation between Amkor Technology and Analog Devices
Given the investment horizon of 90 days Amkor Technology is expected to generate 1.72 times less return on investment than Analog Devices. But when comparing it to its historical volatility, Amkor Technology is 1.1 times less risky than Analog Devices. It trades about 0.12 of its potential returns per unit of risk. Analog Devices is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 20,778 in Analog Devices on October 20, 2024 and sell it today you would earn a total of 1,138 from holding Analog Devices or generate 5.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amkor Technology vs. Analog Devices
Performance |
| Timeline |
| Amkor Technology |
| Analog Devices |
Amkor Technology and Analog Devices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and Analog Devices
The main advantage of trading using opposite Amkor Technology and Analog Devices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, Analog Devices 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 Analog Devices will offset losses from the drop in Analog Devices' long position.| Amkor Technology vs. Power Integrations | Amkor Technology vs. Diodes Incorporated | Amkor Technology vs. MACOM Technology Solutions | Amkor Technology vs. Cirrus Logic |
| Analog Devices vs. NXP Semiconductors NV | Analog Devices vs. Qualcomm Incorporated | Analog Devices vs. Broadcom | Analog Devices vs. Microchip 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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