Correlation Between MGIC INVESTMENT and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both MGIC INVESTMENT 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 MGIC INVESTMENT and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC INVESTMENT and Amkor Technology, you can compare the effects of market volatilities on MGIC INVESTMENT 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 MGIC INVESTMENT with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC INVESTMENT and Amkor Technology.
Diversification Opportunities for MGIC INVESTMENT and Amkor Technology
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between MGIC and Amkor is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding MGIC INVESTMENT and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and MGIC INVESTMENT 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 MGIC INVESTMENT 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 MGIC INVESTMENT i.e., MGIC INVESTMENT and Amkor Technology go up and down completely randomly.
Pair Corralation between MGIC INVESTMENT and Amkor Technology
Assuming the 90 days trading horizon MGIC INVESTMENT is expected to generate 0.39 times more return on investment than Amkor Technology. However, MGIC INVESTMENT is 2.59 times less risky than Amkor Technology. It trades about 0.13 of its potential returns per unit of risk. Amkor Technology is currently generating about 0.01 per unit of risk. If you would invest 1,185 in MGIC INVESTMENT on September 3, 2024 and sell it today you would earn a total of 1,295 from holding MGIC INVESTMENT or generate 109.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGIC INVESTMENT vs. Amkor Technology
Performance |
| Timeline |
| MGIC INVESTMENT |
| Amkor Technology |
MGIC INVESTMENT and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC INVESTMENT and Amkor Technology
The main advantage of trading using opposite MGIC INVESTMENT and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC INVESTMENT 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.| MGIC INVESTMENT vs. TOTAL GABON | MGIC INVESTMENT vs. Walgreens Boots Alliance | MGIC INVESTMENT vs. Peak Resources Limited |
| Amkor Technology vs. NVIDIA | Amkor Technology vs. Taiwan Semiconductor Manufacturing | Amkor Technology vs. Advanced Micro Devices | Amkor Technology vs. Intel |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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