Correlation Between Amkor Technology and Flex
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and Flex 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 Flex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and Flex, you can compare the effects of market volatilities on Amkor Technology and Flex 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 Flex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and Flex.
Diversification Opportunities for Amkor Technology and Flex
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amkor and Flex is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Flex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flex 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 Flex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flex has no effect on the direction of Amkor Technology i.e., Amkor Technology and Flex go up and down completely randomly.
Pair Corralation between Amkor Technology and Flex
Given the investment horizon of 90 days Amkor Technology is expected to generate 23.14 times less return on investment than Flex. But when comparing it to its historical volatility, Amkor Technology is 1.7 times less risky than Flex. It trades about 0.01 of its potential returns per unit of risk. Flex is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,157 in Flex on August 26, 2024 and sell it today you would earn a total of 2,973 from holding Flex or generate 256.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amkor Technology vs. Flex
Performance |
| Timeline |
| Amkor Technology |
| Flex |
Amkor Technology and Flex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and Flex
The main advantage of trading using opposite Amkor Technology and Flex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, Flex 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 Flex will offset losses from the drop in Flex's long position.| Amkor Technology vs. Power Integrations | Amkor Technology vs. Diodes Incorporated | Amkor Technology vs. MACOM Technology Solutions | Amkor Technology vs. Cirrus Logic |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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