Correlation Between ChipMOS Technologies and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both ChipMOS Technologies 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 ChipMOS Technologies and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChipMOS Technologies and Amkor Technology, you can compare the effects of market volatilities on ChipMOS Technologies 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 ChipMOS Technologies with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChipMOS Technologies and Amkor Technology.
Diversification Opportunities for ChipMOS Technologies and Amkor Technology
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ChipMOS and Amkor is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding ChipMOS Technologies and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and ChipMOS Technologies 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 ChipMOS Technologies 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 ChipMOS Technologies i.e., ChipMOS Technologies and Amkor Technology go up and down completely randomly.
Pair Corralation between ChipMOS Technologies and Amkor Technology
Given the investment horizon of 90 days ChipMOS Technologies is expected to generate 0.63 times more return on investment than Amkor Technology. However, ChipMOS Technologies is 1.58 times less risky than Amkor Technology. It trades about -0.08 of its potential returns per unit of risk. Amkor Technology is currently generating about -0.05 per unit of risk. If you would invest 2,875 in ChipMOS Technologies on December 2, 2024 and sell it today you would lose (1,016) from holding ChipMOS Technologies or give up 35.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChipMOS Technologies vs. Amkor Technology
Performance |
| Timeline |
| ChipMOS Technologies |
| Amkor Technology |
ChipMOS Technologies and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChipMOS Technologies and Amkor Technology
The main advantage of trading using opposite ChipMOS Technologies and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChipMOS Technologies 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.| ChipMOS Technologies vs. Nano Labs | ||
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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