Correlation Between Amkor Technology and LILLY

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

By analyzing existing cross correlation between Amkor Technology and LILLY ELI 7125, you can compare the effects of market volatilities on Amkor Technology and LILLY 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 LILLY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and LILLY.

Diversification Opportunities for Amkor Technology and LILLY

-0.09

Correlation Coefficient

Amkor Technology  LILLY

Good diversification

The 3 months correlation between Amkor and LILLY is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and LILLY ELI 7125 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LILLY ELI 7125 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 LILLY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LILLY ELI 7125 has no effect on the direction of Amkor Technology i.e., Amkor Technology and LILLY go up and down completely randomly.

Pair Corralation between Amkor Technology and LILLY

Given the investment horizon of 90 days Amkor Technology is expected to generate 3.54 times more return on investment than LILLY. However, Amkor Technology is 3.54 times more volatile than LILLY ELI 7125. It trades about 0.09 of its potential returns per unit of risk. LILLY ELI 7125 is currently generating about 0.2 per unit of risk. If you would invest  2,555  in Amkor Technology on September 28, 2024 and sell it today you would earn a total of  85.00  from holding Amkor Technology or generate 3.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	75.0%
Values	Daily Returns

Amkor Technology  vs.  LILLY ELI 7125

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.

LILLY ELI 7125

Risk-Adjusted Performance

3 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in LILLY ELI 7125 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, LILLY is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amkor Technology and LILLY

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

The idea behind Amkor Technology and LILLY ELI 7125 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.