Correlation Between Amkor Technology and Timken
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and Timken 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 Timken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and Timken Company, you can compare the effects of market volatilities on Amkor Technology and Timken 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 Timken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and Timken.
Diversification Opportunities for Amkor Technology and Timken
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Amkor and Timken is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Timken Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timken Company 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 Timken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timken Company has no effect on the direction of Amkor Technology i.e., Amkor Technology and Timken go up and down completely randomly.
Pair Corralation between Amkor Technology and Timken
Given the investment horizon of 90 days Amkor Technology is expected to generate 1.48 times more return on investment than Timken. However, Amkor Technology is 1.48 times more volatile than Timken Company. It trades about 0.01 of its potential returns per unit of risk. Timken Company is currently generating about 0.02 per unit of risk. If you would invest 2,669 in Amkor Technology on August 25, 2024 and sell it today you would lose (15.00) from holding Amkor Technology or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Amkor Technology vs. Timken Company
Performance |
| Timeline |
| Amkor Technology |
| Timken Company |
Amkor Technology and Timken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amkor Technology and Timken
The main advantage of trading using opposite Amkor Technology and Timken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, Timken 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 Timken will offset losses from the drop in Timken's long position.| Amkor Technology vs. Teradyne | Amkor Technology vs. Ichor Holdings | Amkor Technology vs. Amtech Systems | Amkor Technology vs. Veeco Instruments |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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