Correlation Between Douglas Emmett and Amkor Technology

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

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

Diversification Opportunities for Douglas Emmett and Amkor Technology

0.75

Correlation Coefficient

Douglas Emmett  Amkor Technology

Poor diversification

The 3 months correlation between Douglas and Amkor is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Douglas Emmett and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and Douglas Emmett 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 Douglas Emmett 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 Douglas Emmett i.e., Douglas Emmett and Amkor Technology go up and down completely randomly.

Pair Corralation between Douglas Emmett and Amkor Technology

Considering the 90-day investment horizon Douglas Emmett is expected to generate 0.85 times more return on investment than Amkor Technology. However, Douglas Emmett is 1.18 times less risky than Amkor Technology. It trades about -0.07 of its potential returns per unit of risk. Amkor Technology is currently generating about -0.14 per unit of risk. If you would invest  1,766  in Douglas Emmett on December 19, 2024 and sell it today you would lose (173.00) from holding Douglas Emmett or give up 9.8% of portfolio value over 90 days.

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

Douglas Emmett  vs.  Amkor Technology

Douglas Emmett

Risk-Adjusted Performance

Very Weak

Over the last 90 days Douglas Emmett has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

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 Douglas Emmett and Amkor Technology

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

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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 CEOs Directory module to screen CEOs from public companies around the world.