Correlation Between Digi International and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both Digi International 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 Digi International and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digi International and Amkor Technology, you can compare the effects of market volatilities on Digi International 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 Digi International with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digi International and Amkor Technology.
Diversification Opportunities for Digi International and Amkor Technology
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Digi and Amkor is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Digi International and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and Digi International 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 Digi International 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 Digi International i.e., Digi International and Amkor Technology go up and down completely randomly.
Pair Corralation between Digi International and Amkor Technology
Given the investment horizon of 90 days Digi International is expected to generate 6.19 times less return on investment than Amkor Technology. But when comparing it to its historical volatility, Digi International is 1.05 times less risky than Amkor Technology. It trades about 0.0 of its potential returns per unit of risk. Amkor Technology is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,617 in Amkor Technology on August 31, 2024 and sell it today you would earn a total of 27.00 from holding Amkor Technology or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digi International vs. Amkor Technology
Performance |
| Timeline |
| Digi International |
| Amkor Technology |
Digi International and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digi International and Amkor Technology
The main advantage of trading using opposite Digi International and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digi International 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.| Digi International vs. Extreme Networks | Digi International vs. Ciena Corp | Digi International vs. Harmonic | Digi International vs. Comtech Telecommunications Corp |
| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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