Correlation Between Rheinmetall and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both Rheinmetall 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 Rheinmetall and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rheinmetall AG and Amkor Technology, you can compare the effects of market volatilities on Rheinmetall 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 Rheinmetall with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rheinmetall and Amkor Technology.
Diversification Opportunities for Rheinmetall and Amkor Technology
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rheinmetall and Amkor is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Rheinmetall AG and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and Rheinmetall 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 Rheinmetall AG 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 Rheinmetall i.e., Rheinmetall and Amkor Technology go up and down completely randomly.
Pair Corralation between Rheinmetall and Amkor Technology
Assuming the 90 days horizon Rheinmetall AG is expected to generate 1.02 times more return on investment than Amkor Technology. However, Rheinmetall is 1.02 times more volatile than Amkor Technology. It trades about 0.22 of its potential returns per unit of risk. Amkor Technology is currently generating about 0.06 per unit of risk. If you would invest 58,440 in Rheinmetall AG on October 19, 2024 and sell it today you would earn a total of 10,660 from holding Rheinmetall AG or generate 18.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rheinmetall AG vs. Amkor Technology
Performance |
| Timeline |
| Rheinmetall AG |
| Amkor Technology |
Rheinmetall and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rheinmetall and Amkor Technology
The main advantage of trading using opposite Rheinmetall and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rheinmetall 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.| Rheinmetall vs. Eaton PLC | Rheinmetall vs. ABB | Rheinmetall vs. 3M Company | Rheinmetall vs. Emerson Electric Co |
| Amkor Technology vs. EVS Broadcast Equipment | Amkor Technology vs. Air Transport Services | Amkor Technology vs. COLUMBIA SPORTSWEAR | Amkor Technology vs. Columbia Sportswear |
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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