Correlation Between Amkor Technology and Air Transport

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

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

Diversification Opportunities for Amkor Technology and Air Transport

-0.84

Correlation Coefficient

Amkor Technology  Air Transport

Pay attention - limited upside

The 3 months correlation between Amkor and Air is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Air Transport Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Transport Services 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 Air Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Transport Services has no effect on the direction of Amkor Technology i.e., Amkor Technology and Air Transport go up and down completely randomly.

Pair Corralation between Amkor Technology and Air Transport

Given the investment horizon of 90 days Amkor Technology is expected to generate 5.17 times more return on investment than Air Transport. However, Amkor Technology is 5.17 times more volatile than Air Transport Services. It trades about 0.0 of its potential returns per unit of risk. Air Transport Services is currently generating about 0.0 per unit of risk. If you would invest  2,687  in Amkor Technology on October 9, 2024 and sell it today you would lose (14.00) from holding Amkor Technology or give up 0.52% of portfolio value over 90 days.

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

Amkor Technology  vs.  Air Transport Services

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. Even with latest inconsistent performance, the Stock's forward-looking signals remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Air Transport Services

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Air Transport Services are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Air Transport reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amkor Technology and Air Transport

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

The idea behind Amkor Technology and Air Transport Services 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.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.