Correlation Between Amkor Technology and Sonos
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and Sonos 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 Sonos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and Sonos Inc, you can compare the effects of market volatilities on Amkor Technology and Sonos 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 Sonos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and Sonos.
Diversification Opportunities for Amkor Technology and Sonos
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amkor and Sonos is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Sonos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonos 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 Sonos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonos Inc has no effect on the direction of Amkor Technology i.e., Amkor Technology and Sonos go up and down completely randomly.
Pair Corralation between Amkor Technology and Sonos
Given the investment horizon of 90 days Amkor Technology is expected to generate 3.5 times less return on investment than Sonos. But when comparing it to its historical volatility, Amkor Technology is 1.64 times less risky than Sonos. It trades about 0.05 of its potential returns per unit of risk. Sonos Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,280 in Sonos Inc on September 2, 2024 and sell it today you would earn a total of 81.00 from holding Sonos Inc or generate 6.33% 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. Sonos Inc
Performance |
| Timeline |
| Amkor Technology |
| Sonos Inc |
Amkor Technology and Sonos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and Sonos
The main advantage of trading using opposite Amkor Technology and Sonos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, Sonos 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 Sonos will offset losses from the drop in Sonos' 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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