Correlation Between Amkor Technology and GENERAL

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Can any of the company-specific risk be diversified away by investing in both Amkor Technology and GENERAL 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 GENERAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and GENERAL DYNAMICS P, you can compare the effects of market volatilities on Amkor Technology and GENERAL 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 GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and GENERAL.

Diversification Opportunities for Amkor Technology and GENERAL

-0.18
  Correlation Coefficient

Good diversification

The 3 months correlation between Amkor and GENERAL is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and GENERAL DYNAMICS P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GENERAL DYNAMICS P 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 GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GENERAL DYNAMICS P has no effect on the direction of Amkor Technology i.e., Amkor Technology and GENERAL go up and down completely randomly.

Pair Corralation between Amkor Technology and GENERAL

Given the investment horizon of 90 days Amkor Technology is expected to generate 0.91 times more return on investment than GENERAL. However, Amkor Technology is 1.1 times less risky than GENERAL. It trades about -0.2 of its potential returns per unit of risk. GENERAL DYNAMICS P is currently generating about -0.21 per unit of risk. If you would invest  2,953  in Amkor Technology on August 29, 2024 and sell it today you would lose (325.00) from holding Amkor Technology or give up 11.01% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy68.18%
ValuesDaily Returns

Amkor Technology  vs.  GENERAL DYNAMICS P

 Performance 
       Timeline  
Amkor Technology 

Risk-Adjusted Performance

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Over the last 90 days Amkor Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.
GENERAL DYNAMICS P 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days GENERAL DYNAMICS P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for GENERAL DYNAMICS P investors.

Amkor Technology and GENERAL Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amkor Technology and GENERAL

The main advantage of trading using opposite Amkor Technology and GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, GENERAL 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 GENERAL will offset losses from the drop in GENERAL's long position.
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The idea behind Amkor Technology and GENERAL DYNAMICS P pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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