Correlation Between Newpark Resources and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both Newpark Resources 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 Newpark Resources and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newpark Resources and Amkor Technology, you can compare the effects of market volatilities on Newpark Resources 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 Newpark Resources with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newpark Resources and Amkor Technology.
Diversification Opportunities for Newpark Resources and Amkor Technology
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Newpark and Amkor is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Newpark Resources and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and Newpark Resources 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 Newpark Resources 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 Newpark Resources i.e., Newpark Resources and Amkor Technology go up and down completely randomly.
Pair Corralation between Newpark Resources and Amkor Technology
Allowing for the 90-day total investment horizon Newpark Resources is expected to generate 0.8 times more return on investment than Amkor Technology. However, Newpark Resources is 1.25 times less risky 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 693.00 in Newpark Resources on September 2, 2024 and sell it today you would earn a total of 143.00 from holding Newpark Resources or generate 20.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newpark Resources vs. Amkor Technology
Performance |
| Timeline |
| Newpark Resources |
| Amkor Technology |
Newpark Resources and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newpark Resources and Amkor Technology
The main advantage of trading using opposite Newpark Resources and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newpark Resources 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.| Newpark Resources vs. Enerflex | Newpark Resources vs. Now Inc | Newpark Resources vs. Bristow Group | Newpark Resources vs. Helix Energy Solutions |
| Amkor Technology vs. NXP Semiconductors NV | Amkor Technology vs. GSI Technology | Amkor Technology vs. MaxLinear | Amkor Technology vs. Texas Instruments Incorporated |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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