Correlation Between Amkor Technology and Nike
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and Nike 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 Nike into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and Nike Inc, you can compare the effects of market volatilities on Amkor Technology and Nike 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 Nike. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and Nike.
Diversification Opportunities for Amkor Technology and Nike
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amkor and Nike is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Nike Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nike Inc 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 Nike. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nike Inc has no effect on the direction of Amkor Technology i.e., Amkor Technology and Nike go up and down completely randomly.
Pair Corralation between Amkor Technology and Nike
Given the investment horizon of 90 days Amkor Technology is expected to under-perform the Nike. In addition to that, Amkor Technology is 1.37 times more volatile than Nike Inc. It trades about -0.06 of its total potential returns per unit of risk. Nike Inc is currently generating about -0.02 per unit of volatility. If you would invest 8,132 in Nike Inc on September 2, 2024 and sell it today you would lose (255.00) from holding Nike Inc or give up 3.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amkor Technology vs. Nike Inc
Performance |
| Timeline |
| Amkor Technology |
| Nike Inc |
Amkor Technology and Nike Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and Nike
The main advantage of trading using opposite Amkor Technology and Nike positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, Nike 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 Nike will offset losses from the drop in Nike's long position.| Amkor Technology vs. NXP Semiconductors NV | Amkor Technology vs. GSI Technology | Amkor Technology vs. MaxLinear | Amkor Technology vs. Texas Instruments Incorporated |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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