Correlation Between Amkor Technology and Valens

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

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

Diversification Opportunities for Amkor Technology and Valens

0.6

Correlation Coefficient

Amkor Technology  Valens

Poor diversification

The 3 months correlation between Amkor and Valens is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Valens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valens 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 Valens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valens has no effect on the direction of Amkor Technology i.e., Amkor Technology and Valens go up and down completely randomly.

Pair Corralation between Amkor Technology and Valens

Given the investment horizon of 90 days Amkor Technology is expected to under-perform the Valens. But the stock apears to be less risky and, when comparing its historical volatility, Amkor Technology is 1.69 times less risky than Valens. The stock trades about -0.17 of its potential returns per unit of risk. The Valens is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  249.00  in Valens on December 27, 2024 and sell it today you would lose (37.00) from holding Valens or give up 14.86% of portfolio value over 90 days.

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

Amkor Technology  vs.  Valens

Amkor Technology

Risk-Adjusted Performance

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 inconsistent performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Valens

Risk-Adjusted Performance

Very Weak

Over the last 90 days Valens has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Amkor Technology and Valens

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

The idea behind Amkor Technology and Valens 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.