Correlation Between Amkor Technology and Innovative Industrial
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and Innovative Industrial 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 Innovative Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and Innovative Industrial Properties, you can compare the effects of market volatilities on Amkor Technology and Innovative Industrial 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 Innovative Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and Innovative Industrial.
Diversification Opportunities for Amkor Technology and Innovative Industrial
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Amkor and Innovative is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Innovative Industrial Properti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovative Industrial 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 Innovative Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovative Industrial has no effect on the direction of Amkor Technology i.e., Amkor Technology and Innovative Industrial go up and down completely randomly.
Pair Corralation between Amkor Technology and Innovative Industrial
Given the investment horizon of 90 days Amkor Technology is expected to generate 1.33 times more return on investment than Innovative Industrial. However, Amkor Technology is 1.33 times more volatile than Innovative Industrial Properties. It trades about -0.11 of its potential returns per unit of risk. Innovative Industrial Properties is currently generating about -0.2 per unit of risk. If you would invest 2,669 in Amkor Technology on October 12, 2024 and sell it today you would lose (111.00) from holding Amkor Technology or give up 4.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amkor Technology vs. Innovative Industrial Properti
Performance |
| Timeline |
| Amkor Technology |
| Innovative Industrial |
Amkor Technology and Innovative Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and Innovative Industrial
The main advantage of trading using opposite Amkor Technology and Innovative Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, Innovative Industrial 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 Innovative Industrial will offset losses from the drop in Innovative Industrial's long position.| Amkor Technology vs. Power Integrations | Amkor Technology vs. Diodes Incorporated | Amkor Technology vs. MACOM Technology Solutions | Amkor Technology vs. Cirrus Logic |
| Innovative Industrial vs. Paysafe | Innovative Industrial vs. Cirmaker Technology | Innovative Industrial vs. Ecovyst | Innovative Industrial vs. NETGEAR |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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