Correlation Between Amkor Technology and Globalfoundries
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and Globalfoundries 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 Globalfoundries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and Globalfoundries, you can compare the effects of market volatilities on Amkor Technology and Globalfoundries 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 Globalfoundries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and Globalfoundries.
Diversification Opportunities for Amkor Technology and Globalfoundries
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Amkor and Globalfoundries is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Globalfoundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globalfoundries 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 Globalfoundries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globalfoundries has no effect on the direction of Amkor Technology i.e., Amkor Technology and Globalfoundries go up and down completely randomly.
Pair Corralation between Amkor Technology and Globalfoundries
Given the investment horizon of 90 days Amkor Technology is expected to generate 1.1 times more return on investment than Globalfoundries. However, Amkor Technology is 1.1 times more volatile than Globalfoundries. It trades about -0.01 of its potential returns per unit of risk. Globalfoundries is currently generating about -0.03 per unit of risk. If you would invest 3,286 in Amkor Technology on September 12, 2024 and sell it today you would lose (618.00) from holding Amkor Technology or give up 18.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amkor Technology vs. Globalfoundries
Performance |
| Timeline |
| Amkor Technology |
| Globalfoundries |
Amkor Technology and Globalfoundries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and Globalfoundries
The main advantage of trading using opposite Amkor Technology and Globalfoundries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, Globalfoundries 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 Globalfoundries will offset losses from the drop in Globalfoundries' long position.| Amkor Technology vs. Power Integrations | Amkor Technology vs. Diodes Incorporated | Amkor Technology vs. MACOM Technology Solutions | Amkor Technology vs. Cirrus Logic |
| Globalfoundries vs. NXP Semiconductors NV | Globalfoundries vs. Analog Devices | Globalfoundries vs. ON Semiconductor | Globalfoundries vs. Lattice Semiconductor |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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