Correlation Between Amkor Technology and Archrock
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and Archrock 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 Archrock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and Archrock, you can compare the effects of market volatilities on Amkor Technology and Archrock 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 Archrock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and Archrock.
Diversification Opportunities for Amkor Technology and Archrock
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amkor and Archrock is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Archrock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archrock 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 Archrock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archrock has no effect on the direction of Amkor Technology i.e., Amkor Technology and Archrock go up and down completely randomly.
Pair Corralation between Amkor Technology and Archrock
Given the investment horizon of 90 days Amkor Technology is expected to generate 10.26 times less return on investment than Archrock. In addition to that, Amkor Technology is 1.39 times more volatile than Archrock. It trades about 0.01 of its total potential returns per unit of risk. Archrock is currently generating about 0.12 per unit of volatility. If you would invest 1,397 in Archrock on August 26, 2024 and sell it today you would earn a total of 1,189 from holding Archrock or generate 85.11% 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. Archrock
Performance |
| Timeline |
| Amkor Technology |
| Archrock |
Amkor Technology and Archrock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and Archrock
The main advantage of trading using opposite Amkor Technology and Archrock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, Archrock 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 Archrock will offset losses from the drop in Archrock's long position.| Amkor Technology vs. Power Integrations | Amkor Technology vs. Diodes Incorporated | Amkor Technology vs. MACOM Technology Solutions | Amkor Technology vs. Cirrus Logic |
| Archrock vs. ProPetro Holding Corp | Archrock vs. Select Energy Services | Archrock vs. USA Compression Partners | Archrock vs. Par Pacific Holdings |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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