Correlation Between Valens and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both Valens 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 Valens and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valens and Amkor Technology, you can compare the effects of market volatilities on Valens 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 Valens with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valens and Amkor Technology.
Diversification Opportunities for Valens and Amkor Technology
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Valens and Amkor is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Valens and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and Valens 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 Valens 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 Valens i.e., Valens and Amkor Technology go up and down completely randomly.
Pair Corralation between Valens and Amkor Technology
Considering the 90-day investment horizon Valens is expected to under-perform the Amkor Technology. In addition to that, Valens is 1.14 times more volatile than Amkor Technology. It trades about -0.02 of its total potential returns per unit of risk. Amkor Technology is currently generating about -0.01 per unit of volatility. If you would invest 3,143 in Amkor Technology on August 28, 2024 and sell it today you would lose (454.00) from holding Amkor Technology or give up 14.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valens vs. Amkor Technology
Performance |
| Timeline |
| Valens |
| Amkor Technology |
Valens and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valens and Amkor Technology
The main advantage of trading using opposite Valens and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valens 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 Valens 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. Power Integrations | Amkor Technology vs. Diodes Incorporated | Amkor Technology vs. MACOM Technology Solutions | Amkor Technology vs. Cirrus Logic |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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