Correlation Between ON Semiconductor and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both ON Semiconductor 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 ON Semiconductor and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ON Semiconductor and Amkor Technology, you can compare the effects of market volatilities on ON Semiconductor 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 ON Semiconductor with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ON Semiconductor and Amkor Technology.
Diversification Opportunities for ON Semiconductor and Amkor Technology
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ON Semiconductor and Amkor is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding ON Semiconductor and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and ON Semiconductor 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 ON Semiconductor 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 ON Semiconductor i.e., ON Semiconductor and Amkor Technology go up and down completely randomly.
Pair Corralation between ON Semiconductor and Amkor Technology
Allowing for the 90-day total investment horizon ON Semiconductor is expected to under-perform the Amkor Technology. In addition to that, ON Semiconductor is 2.3 times more volatile than Amkor Technology. It trades about -0.33 of its total potential returns per unit of risk. Amkor Technology is currently generating about 0.02 per unit of volatility. If you would invest 2,647 in Amkor Technology on October 25, 2024 and sell it today you would earn a total of 6.00 from holding Amkor Technology or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ON Semiconductor vs. Amkor Technology
Performance |
| Timeline |
| ON Semiconductor |
| Amkor Technology |
ON Semiconductor and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ON Semiconductor and Amkor Technology
The main advantage of trading using opposite ON Semiconductor and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ON Semiconductor 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.| ON Semiconductor vs. Texas Instruments Incorporated | ON Semiconductor vs. Microchip Technology | ON Semiconductor vs. Analog Devices | ON Semiconductor vs. Qorvo Inc |
| Amkor Technology vs. Power Integrations | Amkor Technology vs. Diodes Incorporated | Amkor Technology vs. MACOM Technology Solutions | Amkor Technology vs. Cirrus Logic |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |