Correlation Between ASE Industrial and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both ASE Industrial 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 ASE Industrial and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASE Industrial Holding and Amkor Technology, you can compare the effects of market volatilities on ASE Industrial 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 ASE Industrial with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASE Industrial and Amkor Technology.
Diversification Opportunities for ASE Industrial and Amkor Technology
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ASE and Amkor is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and ASE Industrial 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 ASE Industrial Holding 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 ASE Industrial i.e., ASE Industrial and Amkor Technology go up and down completely randomly.
Pair Corralation between ASE Industrial and Amkor Technology
Considering the 90-day investment horizon ASE Industrial Holding is expected to generate 0.74 times more return on investment than Amkor Technology. However, ASE Industrial Holding is 1.36 times less risky than Amkor Technology. It trades about 0.05 of its potential returns per unit of risk. Amkor Technology is currently generating about 0.02 per unit of risk. If you would invest 726.00 in ASE Industrial Holding on September 12, 2024 and sell it today you would earn a total of 255.00 from holding ASE Industrial Holding or generate 35.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASE Industrial Holding vs. Amkor Technology
Performance |
| Timeline |
| ASE Industrial Holding |
| Amkor Technology |
ASE Industrial and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASE Industrial and Amkor Technology
The main advantage of trading using opposite ASE Industrial and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial 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.| ASE Industrial vs. NVIDIA | ASE Industrial vs. Taiwan Semiconductor Manufacturing | ASE Industrial vs. Micron Technology | ASE Industrial vs. Qualcomm Incorporated |
| Amkor Technology vs. Power Integrations | Amkor Technology vs. Diodes Incorporated | Amkor Technology vs. MACOM Technology Solutions | Amkor Technology vs. Cirrus Logic |
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 CEOs Directory module to screen CEOs from public companies around the world.
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