Correlation Between Sonos and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both Sonos 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 Sonos and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sonos Inc and Amkor Technology, you can compare the effects of market volatilities on Sonos 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 Sonos with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonos and Amkor Technology.
Diversification Opportunities for Sonos and Amkor Technology
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sonos and Amkor is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sonos Inc and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and Sonos 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 Sonos Inc 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 Sonos i.e., Sonos and Amkor Technology go up and down completely randomly.
Pair Corralation between Sonos and Amkor Technology
Given the investment horizon of 90 days Sonos Inc is expected to under-perform the Amkor Technology. But the stock apears to be less risky and, when comparing its historical volatility, Sonos Inc is 1.17 times less risky than Amkor Technology. The stock trades about -0.01 of its potential returns per unit of risk. The Amkor Technology is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,961 in Amkor Technology on September 4, 2024 and sell it today you would lose (233.00) from holding Amkor Technology or give up 7.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sonos Inc vs. Amkor Technology
Performance |
| Timeline |
| Sonos Inc |
| Amkor Technology |
Sonos and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonos and Amkor Technology
The main advantage of trading using opposite Sonos and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonos 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.The idea behind Sonos Inc and Amkor Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Amkor Technology vs. NXP Semiconductors NV | Amkor Technology vs. Analog Devices | Amkor Technology vs. Monolithic Power Systems | Amkor Technology vs. ON Semiconductor |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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