Correlation Between Amkor Technology and Perseus Mining

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

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

Diversification Opportunities for Amkor Technology and Perseus Mining

0.13

Correlation Coefficient

Amkor Technology  Perseus Mining

Average diversification

The 3 months correlation between Amkor and Perseus is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining 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 Perseus Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perseus Mining has no effect on the direction of Amkor Technology i.e., Amkor Technology and Perseus Mining go up and down completely randomly.

Pair Corralation between Amkor Technology and Perseus Mining

Assuming the 90 days horizon Amkor Technology is expected to under-perform the Perseus Mining. In addition to that, Amkor Technology is 1.05 times more volatile than Perseus Mining Limited. It trades about -0.04 of its total potential returns per unit of risk. Perseus Mining Limited is currently generating about 0.06 per unit of volatility. If you would invest  152.00  in Perseus Mining Limited on September 16, 2024 and sell it today you would earn a total of  12.00  from holding Perseus Mining Limited or generate 7.89% return on investment over 90 days.

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

Amkor Technology  vs.  Perseus Mining Limited

Amkor Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amkor Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Perseus Mining

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Perseus Mining Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Perseus Mining may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Amkor Technology and Perseus Mining

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

The idea behind Amkor Technology and Perseus Mining Limited 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.