Correlation Between Amkor Technology and MARATHON

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

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

Diversification Opportunities for Amkor Technology and MARATHON

0.1

Correlation Coefficient

Amkor Technology  MARATHON

Average diversification

The 3 months correlation between Amkor and MARATHON is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and MARATHON PETE P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARATHON PETE P 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 MARATHON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MARATHON PETE P has no effect on the direction of Amkor Technology i.e., Amkor Technology and MARATHON go up and down completely randomly.

Pair Corralation between Amkor Technology and MARATHON

Given the investment horizon of 90 days Amkor Technology is expected to generate 1.52 times more return on investment than MARATHON. However, Amkor Technology is 1.52 times more volatile than MARATHON PETE P. It trades about -0.01 of its potential returns per unit of risk. MARATHON PETE P is currently generating about -0.13 per unit of risk. If you would invest  2,679  in Amkor Technology on October 10, 2024 and sell it today you would lose (23.00) from holding Amkor Technology or give up 0.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Amkor Technology  vs.  MARATHON PETE P

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.

MARATHON PETE P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MARATHON PETE P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MARATHON 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 MARATHON

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

The idea behind Amkor Technology and MARATHON PETE P 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.