Correlation Between Estee Lauder and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both Estee Lauder 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 Estee Lauder and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Estee Lauder Companies and Amkor Technology, you can compare the effects of market volatilities on Estee Lauder 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 Estee Lauder with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Estee Lauder and Amkor Technology.
Diversification Opportunities for Estee Lauder and Amkor Technology
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Estee and Amkor is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Estee Lauder Companies and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and Estee Lauder 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 Estee Lauder Companies 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 Estee Lauder i.e., Estee Lauder and Amkor Technology go up and down completely randomly.
Pair Corralation between Estee Lauder and Amkor Technology
Allowing for the 90-day total investment horizon Estee Lauder Companies is expected to under-perform the Amkor Technology. In addition to that, Estee Lauder is 2.05 times more volatile than Amkor Technology. It trades about -0.14 of its total potential returns per unit of risk. Amkor Technology is currently generating about -0.2 per unit of volatility. If you would invest 2,953 in Amkor Technology on August 29, 2024 and sell it today you would lose (325.00) from holding Amkor Technology or give up 11.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Estee Lauder Companies vs. Amkor Technology
Performance |
| Timeline |
| Estee Lauder Companies |
| Amkor Technology |
Estee Lauder and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Estee Lauder and Amkor Technology
The main advantage of trading using opposite Estee Lauder and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Estee Lauder 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.| Estee Lauder vs. Hims Hers Health | Estee Lauder vs. Procter Gamble | Estee Lauder vs. Kimberly Clark | Estee Lauder vs. Colgate Palmolive |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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