Correlation Between ASM Pacific and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both ASM Pacific 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 ASM Pacific and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASM Pacific Technology and Amkor Technology, you can compare the effects of market volatilities on ASM Pacific 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 ASM Pacific with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASM Pacific and Amkor Technology.
Diversification Opportunities for ASM Pacific and Amkor Technology
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ASM and Amkor is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding ASM Pacific Technology and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and ASM Pacific 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 ASM Pacific Technology 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 ASM Pacific i.e., ASM Pacific and Amkor Technology go up and down completely randomly.
Pair Corralation between ASM Pacific and Amkor Technology
Assuming the 90 days trading horizon ASM Pacific Technology is expected to generate 2.38 times more return on investment than Amkor Technology. However, ASM Pacific is 2.38 times more volatile than Amkor Technology. It trades about -0.04 of its potential returns per unit of risk. Amkor Technology is currently generating about -0.13 per unit of risk. If you would invest 885.00 in ASM Pacific Technology on November 3, 2024 and sell it today you would lose (50.00) from holding ASM Pacific Technology or give up 5.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
ASM Pacific Technology vs. Amkor Technology
Performance |
| Timeline |
| ASM Pacific Technology |
| Amkor Technology |
ASM Pacific and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASM Pacific and Amkor Technology
The main advantage of trading using opposite ASM Pacific and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASM Pacific 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.| ASM Pacific vs. ASML HOLDING NY | ASM Pacific vs. ASML Holding NV | ASM Pacific vs. ASML Holding NV | ASM Pacific vs. Applied Materials |
| Amkor Technology vs. NVIDIA | Amkor Technology vs. NVIDIA | Amkor Technology vs. Taiwan Semiconductor Manufacturing | 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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