Correlation Between Waste Management and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both Waste Management 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 Waste Management and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Waste Management and Amkor Technology, you can compare the effects of market volatilities on Waste Management 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 Waste Management with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waste Management and Amkor Technology.
Diversification Opportunities for Waste Management and Amkor Technology
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Waste and Amkor is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Waste Management and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and Waste Management 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 Waste Management 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 Waste Management i.e., Waste Management and Amkor Technology go up and down completely randomly.
Pair Corralation between Waste Management and Amkor Technology
Assuming the 90 days trading horizon Waste Management is expected to generate 0.58 times more return on investment than Amkor Technology. However, Waste Management is 1.71 times less risky than Amkor Technology. It trades about 0.24 of its potential returns per unit of risk. Amkor Technology is currently generating about -0.01 per unit of risk. If you would invest 20,175 in Waste Management on August 30, 2024 and sell it today you would earn a total of 1,430 from holding Waste Management or generate 7.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Waste Management vs. Amkor Technology
Performance |
| Timeline |
| Waste Management |
| Amkor Technology |
Waste Management and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Waste Management and Amkor Technology
The main advantage of trading using opposite Waste Management and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Waste Management 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.| Waste Management vs. Apple Inc | Waste Management vs. Apple Inc | Waste Management vs. Superior Plus Corp | Waste Management vs. SIVERS SEMICONDUCTORS AB |
| Amkor Technology vs. NVIDIA | Amkor Technology vs. Texas Instruments Incorporated | Amkor Technology vs. Advanced Micro Devices | Amkor Technology vs. Advanced Micro Devices |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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