Correlation Between Amkor Technology and BORR DRILLING
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and BORR DRILLING 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 Amkor Technology and BORR DRILLING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and BORR DRILLING NEW, you can compare the effects of market volatilities on Amkor Technology and BORR DRILLING 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 Amkor Technology with a short position of BORR DRILLING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and BORR DRILLING.
Diversification Opportunities for Amkor Technology and BORR DRILLING
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Amkor and BORR is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and BORR DRILLING NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BORR DRILLING NEW and Amkor Technology 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 Amkor Technology are associated (or correlated) with BORR DRILLING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BORR DRILLING NEW has no effect on the direction of Amkor Technology i.e., Amkor Technology and BORR DRILLING go up and down completely randomly.
Pair Corralation between Amkor Technology and BORR DRILLING
Assuming the 90 days horizon Amkor Technology is expected to generate 0.57 times more return on investment than BORR DRILLING. However, Amkor Technology is 1.76 times less risky than BORR DRILLING. It trades about -0.12 of its potential returns per unit of risk. BORR DRILLING NEW is currently generating about -0.09 per unit of risk. If you would invest 2,749 in Amkor Technology on September 23, 2024 and sell it today you would lose (341.00) from holding Amkor Technology or give up 12.4% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Amkor Technology vs. BORR DRILLING NEW
Performance |
Timeline |
Amkor Technology |
BORR DRILLING NEW |
Amkor Technology and BORR DRILLING Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Amkor Technology and BORR DRILLING
The main advantage of trading using opposite Amkor Technology and BORR DRILLING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, BORR DRILLING 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 BORR DRILLING will offset losses from the drop in BORR DRILLING's long position.Amkor Technology vs. AGRICULTBK HADR25 YC | Amkor Technology vs. CDL INVESTMENT | Amkor Technology vs. Virtus Investment Partners | Amkor Technology vs. WisdomTree Investments |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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