Correlation Between Universal Display and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both Universal Display 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 Universal Display and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Display and Amkor Technology, you can compare the effects of market volatilities on Universal Display 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 Universal Display with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Display and Amkor Technology.
Diversification Opportunities for Universal Display and Amkor Technology
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Universal and Amkor is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Universal Display and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and Universal Display 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 Universal Display 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 Universal Display i.e., Universal Display and Amkor Technology go up and down completely randomly.
Pair Corralation between Universal Display and Amkor Technology
Assuming the 90 days horizon Universal Display is expected to generate 1.39 times less return on investment than Amkor Technology. But when comparing it to its historical volatility, Universal Display is 1.17 times less risky than Amkor Technology. It trades about 0.01 of its potential returns per unit of risk. Amkor Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,620 in Amkor Technology on September 4, 2024 and sell it today you would lose (170.00) from holding Amkor Technology or give up 6.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Display vs. Amkor Technology
Performance |
| Timeline |
| Universal Display |
| Amkor Technology |
Universal Display and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Display and Amkor Technology
The main advantage of trading using opposite Universal Display and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Display 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.| Universal Display vs. ASML HOLDING NY | Universal Display vs. ASML Holding NV | Universal Display vs. ASML Holding NV | Universal Display vs. Lam Research |
| Amkor Technology vs. NVIDIA | Amkor Technology vs. Taiwan Semiconductor Manufacturing | Amkor Technology vs. Advanced Micro Devices | Amkor Technology vs. Intel |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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