Correlation Between DiamondRock Hospitality and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both DiamondRock Hospitality 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 DiamondRock Hospitality and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DiamondRock Hospitality and Amkor Technology, you can compare the effects of market volatilities on DiamondRock Hospitality 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 DiamondRock Hospitality with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of DiamondRock Hospitality and Amkor Technology.
Diversification Opportunities for DiamondRock Hospitality and Amkor Technology
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DiamondRock and Amkor is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding DiamondRock Hospitality and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and DiamondRock Hospitality 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 DiamondRock Hospitality 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 DiamondRock Hospitality i.e., DiamondRock Hospitality and Amkor Technology go up and down completely randomly.
Pair Corralation between DiamondRock Hospitality and Amkor Technology
Assuming the 90 days horizon DiamondRock Hospitality is expected to generate 1.06 times more return on investment than Amkor Technology. However, DiamondRock Hospitality is 1.06 times more volatile than Amkor Technology. It trades about 0.04 of its potential returns per unit of risk. Amkor Technology is currently generating about 0.01 per unit of risk. If you would invest 697.00 in DiamondRock Hospitality on September 12, 2024 and sell it today you would earn a total of 213.00 from holding DiamondRock Hospitality or generate 30.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DiamondRock Hospitality vs. Amkor Technology
Performance |
| Timeline |
| DiamondRock Hospitality |
| Amkor Technology |
DiamondRock Hospitality and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DiamondRock Hospitality and Amkor Technology
The main advantage of trading using opposite DiamondRock Hospitality and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DiamondRock Hospitality 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.| DiamondRock Hospitality vs. BRAEMAR HOTELS RES | DiamondRock Hospitality vs. Sotherly Hotels | DiamondRock Hospitality vs. Superior Plus Corp | DiamondRock Hospitality vs. SIVERS SEMICONDUCTORS AB |
| Amkor Technology vs. Taiwan Semiconductor Manufacturing | Amkor Technology vs. Broadcom | Amkor Technology vs. Superior Plus Corp | Amkor Technology vs. SIVERS SEMICONDUCTORS AB |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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