Correlation Between Amkor Technology and Small Cap
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and Small Cap 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 Small Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and Small Cap Premium, you can compare the effects of market volatilities on Amkor Technology and Small Cap 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 Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and Small Cap.
Diversification Opportunities for Amkor Technology and Small Cap
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amkor and Small is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Small Cap Premium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Premium 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 Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Premium has no effect on the direction of Amkor Technology i.e., Amkor Technology and Small Cap go up and down completely randomly.
Pair Corralation between Amkor Technology and Small Cap
Given the investment horizon of 90 days Amkor Technology is expected to generate 4.34 times more return on investment than Small Cap. However, Amkor Technology is 4.34 times more volatile than Small Cap Premium. It trades about 0.02 of its potential returns per unit of risk. Small Cap Premium is currently generating about -0.03 per unit of risk. If you would invest 2,661 in Amkor Technology on September 12, 2024 and sell it today you would earn a total of 7.00 from holding Amkor Technology or generate 0.26% 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. Small Cap Premium
Performance |
| Timeline |
| Amkor Technology |
| Small Cap Premium |
Amkor Technology and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and Small Cap
The main advantage of trading using opposite Amkor Technology and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, Small Cap 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 Small Cap will offset losses from the drop in Small Cap's long position.| Amkor Technology vs. Power Integrations | Amkor Technology vs. Diodes Incorporated | Amkor Technology vs. MACOM Technology Solutions | Amkor Technology vs. Cirrus Logic |
| Small Cap vs. RiverNorth Specialty Finance | Small Cap vs. Royce Micro Cap | Small Cap vs. Voya Global Advantage | Small Cap vs. Ready Capital |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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