Correlation Between Amkor Technology and Kaiser Aluminum
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and Kaiser Aluminum 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 Kaiser Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and Kaiser Aluminum, you can compare the effects of market volatilities on Amkor Technology and Kaiser Aluminum 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 Kaiser Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and Kaiser Aluminum.
Diversification Opportunities for Amkor Technology and Kaiser Aluminum
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amkor and Kaiser is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Kaiser Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaiser Aluminum 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 Kaiser Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaiser Aluminum has no effect on the direction of Amkor Technology i.e., Amkor Technology and Kaiser Aluminum go up and down completely randomly.
Pair Corralation between Amkor Technology and Kaiser Aluminum
Given the investment horizon of 90 days Amkor Technology is expected to under-perform the Kaiser Aluminum. But the stock apears to be less risky and, when comparing its historical volatility, Amkor Technology is 1.27 times less risky than Kaiser Aluminum. The stock trades about -0.05 of its potential returns per unit of risk. The Kaiser Aluminum is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 7,675 in Kaiser Aluminum on August 31, 2024 and sell it today you would earn a total of 491.00 from holding Kaiser Aluminum or generate 6.4% 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. Kaiser Aluminum
Performance |
| Timeline |
| Amkor Technology |
| Kaiser Aluminum |
Amkor Technology and Kaiser Aluminum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and Kaiser Aluminum
The main advantage of trading using opposite Amkor Technology and Kaiser Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, Kaiser Aluminum 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 Kaiser Aluminum will offset losses from the drop in Kaiser Aluminum's long position.| Amkor Technology vs. Power Integrations | Amkor Technology vs. Diodes Incorporated | Amkor Technology vs. MACOM Technology Solutions | Amkor Technology vs. Cirrus Logic |
| Kaiser Aluminum vs. RLJ Lodging Trust | Kaiser Aluminum vs. Aquagold International | Kaiser Aluminum vs. Stepstone Group | Kaiser Aluminum vs. Morningstar Unconstrained Allocation |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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