Correlation Between EPAM Systems and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both EPAM Systems 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 EPAM Systems and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EPAM Systems and Amkor Technology, you can compare the effects of market volatilities on EPAM Systems 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 EPAM Systems with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPAM Systems and Amkor Technology.
Diversification Opportunities for EPAM Systems and Amkor Technology
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between EPAM and Amkor is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding EPAM Systems and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and EPAM Systems 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 EPAM Systems 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 EPAM Systems i.e., EPAM Systems and Amkor Technology go up and down completely randomly.
Pair Corralation between EPAM Systems and Amkor Technology
Given the investment horizon of 90 days EPAM Systems is expected to under-perform the Amkor Technology. In addition to that, EPAM Systems is 1.09 times more volatile than Amkor Technology. It trades about -0.27 of its total potential returns per unit of risk. Amkor Technology is currently generating about -0.22 per unit of volatility. If you would invest 2,461 in Amkor Technology on December 2, 2024 and sell it today you would lose (351.00) from holding Amkor Technology or give up 14.26% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
EPAM Systems vs. Amkor Technology
Performance |
Timeline |
EPAM Systems |
Amkor Technology |
EPAM Systems and Amkor Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with EPAM Systems and Amkor Technology
The main advantage of trading using opposite EPAM Systems and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPAM Systems 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.EPAM Systems vs. Concentrix | EPAM Systems vs. Gartner | EPAM Systems vs. Accenture plc | EPAM Systems vs. International Business Machines |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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