Correlation Between Amkor Technology and Steven Madden
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and Steven Madden 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 Steven Madden into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and Steven Madden, you can compare the effects of market volatilities on Amkor Technology and Steven Madden 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 Steven Madden. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and Steven Madden.
Diversification Opportunities for Amkor Technology and Steven Madden
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amkor and Steven is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Steven Madden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steven Madden 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 Steven Madden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steven Madden has no effect on the direction of Amkor Technology i.e., Amkor Technology and Steven Madden go up and down completely randomly.
Pair Corralation between Amkor Technology and Steven Madden
Given the investment horizon of 90 days Amkor Technology is expected to generate 1.29 times less return on investment than Steven Madden. In addition to that, Amkor Technology is 1.59 times more volatile than Steven Madden. It trades about 0.02 of its total potential returns per unit of risk. Steven Madden is currently generating about 0.05 per unit of volatility. If you would invest 3,127 in Steven Madden on September 13, 2024 and sell it today you would earn a total of 1,274 from holding Steven Madden or generate 40.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amkor Technology vs. Steven Madden
Performance |
| Timeline |
| Amkor Technology |
| Steven Madden |
Amkor Technology and Steven Madden Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and Steven Madden
The main advantage of trading using opposite Amkor Technology and Steven Madden positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, Steven Madden 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 Steven Madden will offset losses from the drop in Steven Madden's long position.| Amkor Technology vs. Power Integrations | Amkor Technology vs. Diodes Incorporated | Amkor Technology vs. MACOM Technology Solutions | Amkor Technology vs. Cirrus Logic |
| Steven Madden vs. Weyco Group | Steven Madden vs. Caleres | Steven Madden vs. Rocky Brands | Steven Madden vs. Designer Brands |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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