Correlation Between CEVA and Amkor Technology

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

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

Diversification Opportunities for CEVA and Amkor Technology

0.39

Correlation Coefficient

CEVA  Amkor Technology

Weak diversification

The 3 months correlation between CEVA and Amkor is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding CEVA Inc and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and CEVA 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 CEVA Inc 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 CEVA i.e., CEVA and Amkor Technology go up and down completely randomly.

Pair Corralation between CEVA and Amkor Technology

Given the investment horizon of 90 days CEVA Inc is expected to generate 1.62 times more return on investment than Amkor Technology. However, CEVA is 1.62 times more volatile than Amkor Technology. It trades about -0.05 of its potential returns per unit of risk. Amkor Technology is currently generating about -0.17 per unit of risk. If you would invest  3,237  in CEVA Inc on December 27, 2024 and sell it today you would lose (496.00) from holding CEVA Inc or give up 15.32% of portfolio value over 90 days.

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

CEVA Inc  vs.  Amkor Technology

CEVA Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days CEVA Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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.

Pair Trading with CEVA and Amkor Technology

The main advantage of trading using opposite CEVA and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEVA 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 CEVA Inc 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.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.