Correlation Between Amkor Technology and Mastercard

Can any of the company-specific risk be diversified away by investing in both Amkor Technology and Mastercard 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 Mastercard into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amkor Technology and Mastercard, you can compare the effects of market volatilities on Amkor Technology and Mastercard 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 Mastercard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and Mastercard.

Diversification Opportunities for Amkor Technology and Mastercard

-0.66

Correlation Coefficient

Amkor Technology  Mastercard

Excellent diversification

The 3 months correlation between Amkor and Mastercard is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Mastercard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastercard 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 Mastercard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mastercard has no effect on the direction of Amkor Technology i.e., Amkor Technology and Mastercard go up and down completely randomly.

Pair Corralation between Amkor Technology and Mastercard

Assuming the 90 days horizon Amkor Technology is expected to generate 4.63 times less return on investment than Mastercard. In addition to that, Amkor Technology is 2.82 times more volatile than Mastercard. It trades about 0.01 of its total potential returns per unit of risk. Mastercard is currently generating about 0.1 per unit of volatility. If you would invest  31,984  in Mastercard on December 2, 2024 and sell it today you would earn a total of  23,146  from holding Mastercard or generate 72.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Amkor Technology  vs.  Mastercard

Amkor Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amkor Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Mastercard

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mastercard are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Mastercard may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Amkor Technology and Mastercard

The main advantage of trading using opposite Amkor Technology and Mastercard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, Mastercard 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 Mastercard will offset losses from the drop in Mastercard's long position.

The idea behind Amkor Technology and Mastercard 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.

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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.