Correlation Between Amkor Technology and Alta Equipment
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and Alta Equipment 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 Alta Equipment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and Alta Equipment Group, you can compare the effects of market volatilities on Amkor Technology and Alta Equipment 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 Alta Equipment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and Alta Equipment.
Diversification Opportunities for Amkor Technology and Alta Equipment
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amkor and Alta is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Alta Equipment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alta Equipment Group 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 Alta Equipment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alta Equipment Group has no effect on the direction of Amkor Technology i.e., Amkor Technology and Alta Equipment go up and down completely randomly.
Pair Corralation between Amkor Technology and Alta Equipment
Given the investment horizon of 90 days Amkor Technology is expected to under-perform the Alta Equipment. But the stock apears to be less risky and, when comparing its historical volatility, Amkor Technology is 2.21 times less risky than Alta Equipment. The stock trades about -0.13 of its potential returns per unit of risk. The Alta Equipment Group is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 639.00 in Alta Equipment Group on August 30, 2024 and sell it today you would earn a total of 135.00 from holding Alta Equipment Group or generate 21.13% 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. Alta Equipment Group
Performance |
| Timeline |
| Amkor Technology |
| Alta Equipment Group |
Amkor Technology and Alta Equipment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and Alta Equipment
The main advantage of trading using opposite Amkor Technology and Alta Equipment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, Alta Equipment 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 Alta Equipment will offset losses from the drop in Alta Equipment's long position.| Amkor Technology vs. Power Integrations | Amkor Technology vs. Diodes Incorporated | Amkor Technology vs. MACOM Technology Solutions | Amkor Technology vs. Cirrus Logic |
| Alta Equipment vs. PROG Holdings | Alta Equipment vs. GATX Corporation | Alta Equipment vs. McGrath RentCorp | Alta Equipment vs. Custom Truck One |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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