Correlation Between Loews Corp and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both Loews Corp 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 Loews Corp and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loews Corp and Amkor Technology, you can compare the effects of market volatilities on Loews Corp 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 Loews Corp with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loews Corp and Amkor Technology.
Diversification Opportunities for Loews Corp and Amkor Technology
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Loews and Amkor is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Loews Corp and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and Loews Corp 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 Loews Corp 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 Loews Corp i.e., Loews Corp and Amkor Technology go up and down completely randomly.
Pair Corralation between Loews Corp and Amkor Technology
Assuming the 90 days horizon Loews Corp is expected to generate 0.84 times more return on investment than Amkor Technology. However, Loews Corp is 1.19 times less risky than Amkor Technology. It trades about 0.29 of its potential returns per unit of risk. Amkor Technology is currently generating about 0.02 per unit of risk. If you would invest 7,344 in Loews Corp on September 1, 2024 and sell it today you would earn a total of 906.00 from holding Loews Corp or generate 12.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loews Corp vs. Amkor Technology
Performance |
| Timeline |
| Loews Corp |
| Amkor Technology |
Loews Corp and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loews Corp and Amkor Technology
The main advantage of trading using opposite Loews Corp and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loews Corp 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.| Loews Corp vs. Pick n Pay | Loews Corp vs. Burlington Stores | Loews Corp vs. EPSILON HEALTHCARE LTD | Loews Corp vs. GUARDANT HEALTH CL |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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