Correlation Between Amkor Technology and Sunny Optical

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

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

Diversification Opportunities for Amkor Technology and Sunny Optical

-0.49

Correlation Coefficient

Amkor Technology  Sunny Optical

Very good diversification

The 3 months correlation between Amkor and Sunny is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Sunny Optical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Optical 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 Sunny Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Optical Technology has no effect on the direction of Amkor Technology i.e., Amkor Technology and Sunny Optical go up and down completely randomly.

Pair Corralation between Amkor Technology and Sunny Optical

Assuming the 90 days horizon Amkor Technology is expected to generate 0.89 times more return on investment than Sunny Optical. However, Amkor Technology is 1.12 times less risky than Sunny Optical. It trades about 0.01 of its potential returns per unit of risk. Sunny Optical Technology is currently generating about 0.01 per unit of risk. If you would invest  2,764  in Amkor Technology on October 5, 2024 and sell it today you would lose (281.00) from holding Amkor Technology or give up 10.17% of portfolio value over 90 days.

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

Amkor Technology  vs.  Sunny Optical Technology

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.

Sunny Optical Technology

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Sunny Optical Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Sunny Optical reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amkor Technology and Sunny Optical

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

The idea behind Amkor Technology and Sunny Optical 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.