Correlation Between Amkor Technology and Schneider Electric

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

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

Diversification Opportunities for Amkor Technology and Schneider Electric

0.67

Correlation Coefficient

Amkor Technology  Schneider Electric

Poor diversification

The 3 months correlation between Amkor and Schneider is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Schneider Electric SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schneider Electric 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 Schneider Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schneider Electric has no effect on the direction of Amkor Technology i.e., Amkor Technology and Schneider Electric go up and down completely randomly.

Pair Corralation between Amkor Technology and Schneider Electric

Assuming the 90 days horizon Amkor Technology is expected to under-perform the Schneider Electric. But the stock apears to be less risky and, when comparing its historical volatility, Amkor Technology is 1.03 times less risky than Schneider Electric. The stock trades about -0.22 of its potential returns per unit of risk. The Schneider Electric SE is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  24,030  in Schneider Electric SE on December 30, 2024 and sell it today you would lose (2,195) from holding Schneider Electric SE or give up 9.13% of portfolio value over 90 days.

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

Amkor Technology  vs.  Schneider Electric SE

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 uncertain 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.

Schneider Electric

Risk-Adjusted Performance

Very Weak

Over the last 90 days Schneider Electric SE 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.

Pair Trading with Amkor Technology and Schneider Electric

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

The idea behind Amkor Technology and Schneider Electric SE 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.