Correlation Between Amkor Technology and LQR House

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

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

Diversification Opportunities for Amkor Technology and LQR House

-0.38

Correlation Coefficient

Amkor Technology  LQR House

Very good diversification

The 3 months correlation between Amkor and LQR is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and LQR House in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LQR House 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 LQR House. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LQR House has no effect on the direction of Amkor Technology i.e., Amkor Technology and LQR House go up and down completely randomly.

Pair Corralation between Amkor Technology and LQR House

Given the investment horizon of 90 days Amkor Technology is expected to under-perform the LQR House. But the stock apears to be less risky and, when comparing its historical volatility, Amkor Technology is 3.99 times less risky than LQR House. The stock trades about -0.17 of its potential returns per unit of risk. The LQR House is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  155.00  in LQR House on December 17, 2024 and sell it today you would earn a total of  57.00  from holding LQR House or generate 36.77% return on investment over 90 days.

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

Amkor Technology  vs.  LQR House

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.

LQR House

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in LQR House are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical indicators, LQR House exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amkor Technology and LQR House

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

The idea behind Amkor Technology and LQR House 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.