Correlation Between Entegris and Amkor Technology

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

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

Diversification Opportunities for Entegris and Amkor Technology

0.6

Correlation Coefficient

Entegris  Amkor Technology

Poor diversification

The 3 months correlation between Entegris and Amkor is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Entegris and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and Entegris 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 Entegris 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 Entegris i.e., Entegris and Amkor Technology go up and down completely randomly.

Pair Corralation between Entegris and Amkor Technology

Given the investment horizon of 90 days Entegris is expected to generate 0.85 times more return on investment than Amkor Technology. However, Entegris is 1.17 times less risky than Amkor Technology. It trades about 0.0 of its potential returns per unit of risk. Amkor Technology is currently generating about -0.01 per unit of risk. If you would invest  11,858  in Entegris on September 13, 2024 and sell it today you would lose (951.00) from holding Entegris or give up 8.02% of portfolio value over 90 days.

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

Entegris  vs.  Amkor Technology

Entegris

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Entegris has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Entegris is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Amkor Technology

Risk-Adjusted Performance

0 of 100

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 latest inconsistent performance, the Stock's forward-looking signals remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Entegris and Amkor Technology

The main advantage of trading using opposite Entegris and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entegris 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 Entegris 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.