Correlation Between Amkor Technology and Citizens Financial

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

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

Diversification Opportunities for Amkor Technology and Citizens Financial

-0.32

Correlation Coefficient

Amkor Technology  Citizens Financial

Very good diversification

The 3 months correlation between Amkor and Citizens is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Citizens Financial Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens Financial Group, 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 Citizens Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens Financial Group, has no effect on the direction of Amkor Technology i.e., Amkor Technology and Citizens Financial go up and down completely randomly.

Pair Corralation between Amkor Technology and Citizens Financial

Given the investment horizon of 90 days Amkor Technology is expected to under-perform the Citizens Financial. In addition to that, Amkor Technology is 5.36 times more volatile than Citizens Financial Group,. It trades about -0.05 of its total potential returns per unit of risk. Citizens Financial Group, is currently generating about 0.14 per unit of volatility. If you would invest  2,603  in Citizens Financial Group, on September 12, 2024 and sell it today you would earn a total of  102.00  from holding Citizens Financial Group, or generate 3.92% return on investment over 90 days.

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

Amkor Technology  vs.  Citizens Financial Group,

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.

Citizens Financial Group,

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citizens Financial Group, are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, Citizens Financial is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Amkor Technology and Citizens Financial

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

The idea behind Amkor Technology and Citizens Financial Group, 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.