Correlation Between Spirent Communications and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both Spirent Communications 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 Spirent Communications and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spirent Communications plc and Amkor Technology, you can compare the effects of market volatilities on Spirent Communications 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 Spirent Communications with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spirent Communications and Amkor Technology.
Diversification Opportunities for Spirent Communications and Amkor Technology
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Spirent and Amkor is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Spirent Communications plc and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and Spirent Communications 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 Spirent Communications plc 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 Spirent Communications i.e., Spirent Communications and Amkor Technology go up and down completely randomly.
Pair Corralation between Spirent Communications and Amkor Technology
Assuming the 90 days horizon Spirent Communications plc is expected to generate 1.36 times more return on investment than Amkor Technology. However, Spirent Communications is 1.36 times more volatile than Amkor Technology. It trades about 0.01 of its potential returns per unit of risk. Amkor Technology is currently generating about 0.01 per unit of risk. If you would invest 238.00 in Spirent Communications plc on November 7, 2024 and sell it today you would lose (30.00) from holding Spirent Communications plc or give up 12.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spirent Communications plc vs. Amkor Technology
Performance |
| Timeline |
| Spirent Communications |
| Amkor Technology |
Spirent Communications and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spirent Communications and Amkor Technology
The main advantage of trading using opposite Spirent Communications and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spirent Communications 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.| Spirent Communications vs. United Microelectronics Corp | Spirent Communications vs. ALTAIR RES INC | Spirent Communications vs. LG Electronics | Spirent Communications vs. Methode Electronics |
| Amkor Technology vs. COSTCO WHOLESALE CDR | Amkor Technology vs. Highlight Communications AG | Amkor Technology vs. Caseys General Stores | Amkor Technology vs. JIAHUA STORES |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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