Correlation Between Amkor Technology and Fevertree Drinks

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

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

Diversification Opportunities for Amkor Technology and Fevertree Drinks

0.77

Correlation Coefficient

Amkor Technology  Fevertree Drinks

Poor diversification

The 3 months correlation between Amkor and Fevertree is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Fevertree Drinks Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fevertree Drinks Plc 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 Fevertree Drinks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fevertree Drinks Plc has no effect on the direction of Amkor Technology i.e., Amkor Technology and Fevertree Drinks go up and down completely randomly.

Pair Corralation between Amkor Technology and Fevertree Drinks

Given the investment horizon of 90 days Amkor Technology is expected to generate 0.99 times more return on investment than Fevertree Drinks. However, Amkor Technology is 1.01 times less risky than Fevertree Drinks. It trades about 0.02 of its potential returns per unit of risk. Fevertree Drinks Plc is currently generating about -0.02 per unit of risk. If you would invest  2,358  in Amkor Technology on October 5, 2024 and sell it today you would earn a total of  296.00  from holding Amkor Technology or generate 12.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	78.46%
Values	Daily Returns

Amkor Technology  vs.  Fevertree Drinks Plc

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 weak 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.

Fevertree Drinks Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fevertree Drinks Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Amkor Technology and Fevertree Drinks

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

The idea behind Amkor Technology and Fevertree Drinks Plc 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .