Correlation Between Aluminumof China and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both Aluminumof China and Amkor Technology 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 Aluminumof China and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluminum of and Amkor Technology, you can compare the effects of market volatilities on Aluminumof China and Amkor Technology 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 Aluminumof China with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminumof China and Amkor Technology.
Diversification Opportunities for Aluminumof China and Amkor Technology
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aluminumof and Amkor is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum of and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and Aluminumof China 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 Aluminum of are associated (or correlated) with Amkor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amkor Technology has no effect on the direction of Aluminumof China i.e., Aluminumof China and Amkor Technology go up and down completely randomly.
Pair Corralation between Aluminumof China and Amkor Technology
Assuming the 90 days horizon Aluminum of is expected to under-perform the Amkor Technology. In addition to that, Aluminumof China is 1.16 times more volatile than Amkor Technology. It trades about -0.19 of its total potential returns per unit of risk. Amkor Technology is currently generating about -0.1 per unit of volatility. If you would invest 2,516 in Amkor Technology on September 24, 2024 and sell it today you would lose (108.00) from holding Amkor Technology or give up 4.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aluminum of vs. Amkor Technology
Performance |
| Timeline |
| Aluminumof China |
| Amkor Technology |
Aluminumof China and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminumof China and Amkor Technology
The main advantage of trading using opposite Aluminumof China and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminumof China position performs unexpectedly, Amkor Technology 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 Amkor Technology will offset losses from the drop in Amkor Technology's long position.| Aluminumof China vs. Norsk Hydro ASA | Aluminumof China vs. Norsk Hydro ASA | Aluminumof China vs. Alcoa Corp | Aluminumof China vs. AMAG Austria Metall |
| Amkor Technology vs. NVIDIA | Amkor Technology vs. Taiwan Semiconductor Manufacturing | Amkor Technology vs. Broadcom | 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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