Correlation Between Amkor Technology and Merit Medical
Can any of the company-specific risk be diversified away by investing in both Amkor Technology and Merit Medical 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 Merit Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and Merit Medical Systems, you can compare the effects of market volatilities on Amkor Technology and Merit Medical 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 Merit Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and Merit Medical.
Diversification Opportunities for Amkor Technology and Merit Medical
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Amkor and Merit is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Merit Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merit Medical Systems 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 Merit Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merit Medical Systems has no effect on the direction of Amkor Technology i.e., Amkor Technology and Merit Medical go up and down completely randomly.
Pair Corralation between Amkor Technology and Merit Medical
Assuming the 90 days horizon Amkor Technology is expected to generate 1.49 times more return on investment than Merit Medical. However, Amkor Technology is 1.49 times more volatile than Merit Medical Systems. It trades about -0.1 of its potential returns per unit of risk. Merit Medical Systems is currently generating about -0.34 per unit of risk. If you would invest 2,516 in Amkor Technology on September 24, 2024 and sell it today you would lose (108.00) from holding Amkor Technology or give up 4.29% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Amkor Technology vs. Merit Medical Systems
Performance |
Timeline |
Amkor Technology |
Merit Medical Systems |
Amkor Technology and Merit Medical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Amkor Technology and Merit Medical
The main advantage of trading using opposite Amkor Technology and Merit Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, Merit Medical 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 Merit Medical will offset losses from the drop in Merit Medical's long position.Amkor Technology vs. NVIDIA | Amkor Technology vs. Taiwan Semiconductor Manufacturing | Amkor Technology vs. Broadcom | Amkor Technology vs. Texas Instruments Incorporated |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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