Correlation Between Amkor Technology and Griffon

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

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

Diversification Opportunities for Amkor Technology and Griffon

-0.55

Correlation Coefficient

Amkor Technology  Griffon

Excellent diversification

The 3 months correlation between Amkor and Griffon is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon 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 Griffon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Griffon has no effect on the direction of Amkor Technology i.e., Amkor Technology and Griffon go up and down completely randomly.

Pair Corralation between Amkor Technology and Griffon

Given the investment horizon of 90 days Amkor Technology is expected to generate 1.33 times more return on investment than Griffon. However, Amkor Technology is 1.33 times more volatile than Griffon. It trades about 0.05 of its potential returns per unit of risk. Griffon is currently generating about -0.52 per unit of risk. If you would invest  2,596  in Amkor Technology on September 29, 2024 and sell it today you would earn a total of  44.00  from holding Amkor Technology or generate 1.69% return on investment over 90 days.

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

Amkor Technology  vs.  Griffon

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.

Griffon

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Griffon are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Griffon is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Amkor Technology and Griffon

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

The idea behind Amkor Technology and Griffon 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.