Correlation Between First Watch and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both First Watch 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 First Watch and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Watch Restaurant and Amkor Technology, you can compare the effects of market volatilities on First Watch 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 First Watch with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Watch and Amkor Technology.
Diversification Opportunities for First Watch and Amkor Technology
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and Amkor is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding First Watch Restaurant and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and First Watch 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 First Watch Restaurant 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 First Watch i.e., First Watch and Amkor Technology go up and down completely randomly.
Pair Corralation between First Watch and Amkor Technology
Given the investment horizon of 90 days First Watch Restaurant is expected to generate 0.93 times more return on investment than Amkor Technology. However, First Watch Restaurant is 1.08 times less risky 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 1,900 in First Watch Restaurant on September 2, 2024 and sell it today you would earn a total of 9.00 from holding First Watch Restaurant or generate 0.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Watch Restaurant vs. Amkor Technology
Performance |
| Timeline |
| First Watch Restaurant |
| Amkor Technology |
First Watch and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Watch and Amkor Technology
The main advantage of trading using opposite First Watch and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Watch 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.The idea behind First Watch Restaurant and Amkor Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Amkor Technology vs. NXP Semiconductors NV | Amkor Technology vs. GSI Technology | Amkor Technology vs. MaxLinear | 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 Stocks Directory module to find actively traded stocks across global markets.
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