Correlation Between Amkor Technology and Allegro Microsystems
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and Allegro Microsystems 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 Allegro Microsystems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and Allegro Microsystems, you can compare the effects of market volatilities on Amkor Technology and Allegro Microsystems 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 Allegro Microsystems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and Allegro Microsystems.
Diversification Opportunities for Amkor Technology and Allegro Microsystems
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Amkor and Allegro is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Allegro Microsystems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegro Microsystems 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 Allegro Microsystems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegro Microsystems has no effect on the direction of Amkor Technology i.e., Amkor Technology and Allegro Microsystems go up and down completely randomly.
Pair Corralation between Amkor Technology and Allegro Microsystems
Given the investment horizon of 90 days Amkor Technology is expected to under-perform the Allegro Microsystems. But the stock apears to be less risky and, when comparing its historical volatility, Amkor Technology is 1.26 times less risky than Allegro Microsystems. The stock trades about -0.11 of its potential returns per unit of risk. The Allegro Microsystems is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,368 in Allegro Microsystems on November 9, 2024 and sell it today you would earn a total of 133.00 from holding Allegro Microsystems or generate 5.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amkor Technology vs. Allegro Microsystems
Performance |
| Timeline |
| Amkor Technology |
| Allegro Microsystems |
Amkor Technology and Allegro Microsystems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and Allegro Microsystems
The main advantage of trading using opposite Amkor Technology and Allegro Microsystems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, Allegro Microsystems 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 Allegro Microsystems will offset losses from the drop in Allegro Microsystems' long position.| Amkor Technology vs. Power Integrations | Amkor Technology vs. Diodes Incorporated | Amkor Technology vs. MACOM Technology Solutions | Amkor Technology vs. Cirrus Logic |
| Allegro Microsystems vs. Synaptics Incorporated | Allegro Microsystems vs. Microchip Technology | Allegro Microsystems vs. Qorvo Inc | Allegro Microsystems vs. Monolithic Power Systems |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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