Correlation Between Bt Brands and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both Bt Brands and Amkor Technology 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 Bt Brands and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bt Brands and Amkor Technology, you can compare the effects of market volatilities on Bt Brands and Amkor Technology 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 Bt Brands with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bt Brands and Amkor Technology.
Diversification Opportunities for Bt Brands and Amkor Technology
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BTBD and Amkor is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bt Brands and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and Bt Brands 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 Bt Brands are associated (or correlated) with Amkor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amkor Technology has no effect on the direction of Bt Brands i.e., Bt Brands and Amkor Technology go up and down completely randomly.
Pair Corralation between Bt Brands and Amkor Technology
Given the investment horizon of 90 days Bt Brands is expected to generate 1.73 times more return on investment than Amkor Technology. However, Bt Brands is 1.73 times more volatile than Amkor Technology. It trades about 0.01 of its potential returns per unit of risk. Amkor Technology is currently generating about -0.06 per unit of risk. If you would invest 163.00 in Bt Brands on September 15, 2024 and sell it today you would lose (3.00) from holding Bt Brands or give up 1.84% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bt Brands vs. Amkor Technology
Performance |
Timeline |
Bt Brands |
Amkor Technology |
Bt Brands and Amkor Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bt Brands and Amkor Technology
The main advantage of trading using opposite Bt Brands and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bt Brands position performs unexpectedly, Amkor Technology 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 Amkor Technology will offset losses from the drop in Amkor Technology's long position.The idea behind Bt Brands and Amkor Technology 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.Amkor Technology vs. ON Semiconductor | Amkor Technology vs. Globalfoundries | Amkor Technology vs. Wisekey International Holding | Amkor Technology vs. Nano Labs |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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