Correlation Between KNOT Offshore and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both KNOT Offshore 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 KNOT Offshore and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KNOT Offshore Partners and Amkor Technology, you can compare the effects of market volatilities on KNOT Offshore 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 KNOT Offshore with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of KNOT Offshore and Amkor Technology.
Diversification Opportunities for KNOT Offshore and Amkor Technology
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KNOT and Amkor is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding KNOT Offshore Partners and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and KNOT Offshore 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 KNOT Offshore Partners 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 KNOT Offshore i.e., KNOT Offshore and Amkor Technology go up and down completely randomly.
Pair Corralation between KNOT Offshore and Amkor Technology
Given the investment horizon of 90 days KNOT Offshore Partners is expected to under-perform the Amkor Technology. But the stock apears to be less risky and, when comparing its historical volatility, KNOT Offshore Partners is 1.6 times less risky than Amkor Technology. The stock trades about -0.18 of its potential returns per unit of risk. The Amkor Technology is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 2,969 in Amkor Technology on September 4, 2024 and sell it today you would lose (241.00) from holding Amkor Technology or give up 8.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KNOT Offshore Partners vs. Amkor Technology
Performance |
| Timeline |
| KNOT Offshore Partners |
| Amkor Technology |
KNOT Offshore and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KNOT Offshore and Amkor Technology
The main advantage of trading using opposite KNOT Offshore and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KNOT Offshore 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.| KNOT Offshore vs. USA Compression Partners | KNOT Offshore vs. Dynagas LNG Partners | KNOT Offshore vs. Crossamerica Partners LP | KNOT Offshore vs. Delek Logistics Partners |
| Amkor Technology vs. NXP Semiconductors NV | Amkor Technology vs. Analog Devices | Amkor Technology vs. Monolithic Power Systems | Amkor Technology vs. ON Semiconductor |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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