Correlation Between Chunghwa Telecom and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both Chunghwa Telecom 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 Chunghwa Telecom and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chunghwa Telecom Co and Amkor Technology, you can compare the effects of market volatilities on Chunghwa Telecom 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 Chunghwa Telecom with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chunghwa Telecom and Amkor Technology.
Diversification Opportunities for Chunghwa Telecom and Amkor Technology
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chunghwa and Amkor is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Chunghwa Telecom Co and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and Chunghwa Telecom 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 Chunghwa Telecom Co 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 Chunghwa Telecom i.e., Chunghwa Telecom and Amkor Technology go up and down completely randomly.
Pair Corralation between Chunghwa Telecom and Amkor Technology
Considering the 90-day investment horizon Chunghwa Telecom Co is expected to generate 0.44 times more return on investment than Amkor Technology. However, Chunghwa Telecom Co is 2.29 times less risky than Amkor Technology. It trades about 0.06 of its potential returns per unit of risk. Amkor Technology is currently generating about -0.16 per unit of risk. If you would invest 3,790 in Chunghwa Telecom Co on August 28, 2024 and sell it today you would earn a total of 52.00 from holding Chunghwa Telecom Co or generate 1.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chunghwa Telecom Co vs. Amkor Technology
Performance |
| Timeline |
| Chunghwa Telecom |
| Amkor Technology |
Chunghwa Telecom and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chunghwa Telecom and Amkor Technology
The main advantage of trading using opposite Chunghwa Telecom and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chunghwa Telecom 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.| Chunghwa Telecom vs. Grupo Televisa SAB | Chunghwa Telecom vs. Orange SA ADR | Chunghwa Telecom vs. Telefonica Brasil SA | Chunghwa Telecom vs. Telefonica SA ADR |
| 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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