Correlation Between Wolfspeed and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both Wolfspeed 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 Wolfspeed and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wolfspeed and Amkor Technology, you can compare the effects of market volatilities on Wolfspeed 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 Wolfspeed with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wolfspeed and Amkor Technology.
Diversification Opportunities for Wolfspeed and Amkor Technology
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wolfspeed and Amkor is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Wolfspeed and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and Wolfspeed 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 Wolfspeed 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 Wolfspeed i.e., Wolfspeed and Amkor Technology go up and down completely randomly.
Pair Corralation between Wolfspeed and Amkor Technology
Given the investment horizon of 90 days Wolfspeed is expected to under-perform the Amkor Technology. In addition to that, Wolfspeed is 2.45 times more volatile than Amkor Technology. It trades about -0.05 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 2,983 in Amkor Technology on November 9, 2024 and sell it today you would lose (523.00) from holding Amkor Technology or give up 17.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wolfspeed vs. Amkor Technology
Performance |
| Timeline |
| Wolfspeed |
| Amkor Technology |
Wolfspeed and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wolfspeed and Amkor Technology
The main advantage of trading using opposite Wolfspeed and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wolfspeed 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.| Wolfspeed vs. NXP Semiconductors NV | Wolfspeed vs. Analog Devices | Wolfspeed vs. Microchip Technology | Wolfspeed vs. Monolithic Power Systems |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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