Correlation Between Amkor Technology and PAX Global

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Can any of the company-specific risk be diversified away by investing in both Amkor Technology and PAX Global 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 PAX Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amkor Technology and PAX Global Technology, you can compare the effects of market volatilities on Amkor Technology and PAX Global 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 PAX Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and PAX Global.

Diversification Opportunities for Amkor Technology and PAX Global

-0.26
  Correlation Coefficient

Very good diversification

The 3 months correlation between Amkor and PAX is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and PAX Global Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAX Global Technology 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 PAX Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAX Global Technology has no effect on the direction of Amkor Technology i.e., Amkor Technology and PAX Global go up and down completely randomly.

Pair Corralation between Amkor Technology and PAX Global

Assuming the 90 days horizon Amkor Technology is expected to generate 5.25 times less return on investment than PAX Global. But when comparing it to its historical volatility, Amkor Technology is 2.68 times less risky than PAX Global. It trades about 0.07 of its potential returns per unit of risk. PAX Global Technology is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  54.00  in PAX Global Technology on September 16, 2024 and sell it today you would earn a total of  8.00  from holding PAX Global Technology or generate 14.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Amkor Technology  vs.  PAX Global Technology

 Performance 
       Timeline  
Amkor Technology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
PAX Global Technology 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in PAX Global Technology are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PAX Global reported solid returns over the last few months and may actually be approaching a breakup point.

Amkor Technology and PAX Global Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amkor Technology and PAX Global

The main advantage of trading using opposite Amkor Technology and PAX Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, PAX Global 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 PAX Global will offset losses from the drop in PAX Global's long position.
The idea behind Amkor Technology and PAX Global Technology 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

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