Correlation Between Steven Madden and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both Steven Madden 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 Steven Madden and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steven Madden and Amkor Technology, you can compare the effects of market volatilities on Steven Madden 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 Steven Madden with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steven Madden and Amkor Technology.
Diversification Opportunities for Steven Madden and Amkor Technology
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Steven and Amkor is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Steven Madden and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and Steven Madden 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 Steven Madden 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 Steven Madden i.e., Steven Madden and Amkor Technology go up and down completely randomly.
Pair Corralation between Steven Madden and Amkor Technology
Given the investment horizon of 90 days Steven Madden is expected to generate 0.51 times more return on investment than Amkor Technology. However, Steven Madden is 1.96 times less risky than Amkor Technology. It trades about 0.03 of its potential returns per unit of risk. Amkor Technology is currently generating about -0.03 per unit of risk. If you would invest 4,411 in Steven Madden on September 5, 2024 and sell it today you would earn a total of 190.00 from holding Steven Madden or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steven Madden vs. Amkor Technology
Performance |
| Timeline |
| Steven Madden |
| Amkor Technology |
Steven Madden and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steven Madden and Amkor Technology
The main advantage of trading using opposite Steven Madden and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steven Madden 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.| Steven Madden vs. On Holding | Steven Madden vs. Crocs Inc | Steven Madden vs. Designer Brands | Steven Madden vs. Adidas AG |
| Amkor Technology vs. NXP Semiconductors NV | Amkor Technology vs. Monolithic Power Systems | Amkor Technology vs. ON Semiconductor | Amkor Technology vs. GSI Technology |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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