Correlation Between Hewlett Packard and Amkor Technology

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

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

Diversification Opportunities for Hewlett Packard and Amkor Technology

0.49

Correlation Coefficient

Hewlett Packard  Amkor Technology

Very weak diversification

The 3 months correlation between Hewlett and Amkor is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Hewlett Packard Enterprise and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and Hewlett Packard 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 Hewlett Packard Enterprise 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 Hewlett Packard i.e., Hewlett Packard and Amkor Technology go up and down completely randomly.

Pair Corralation between Hewlett Packard and Amkor Technology

Considering the 90-day investment horizon Hewlett Packard Enterprise is expected to generate 0.78 times more return on investment than Amkor Technology. However, Hewlett Packard Enterprise is 1.29 times less risky than Amkor Technology. It trades about 0.03 of its potential returns per unit of risk. Amkor Technology is currently generating about -0.05 per unit of risk. If you would invest  1,770  in Hewlett Packard Enterprise on December 2, 2024 and sell it today you would earn a total of  211.00  from holding Hewlett Packard Enterprise or generate 11.92% return on investment over 90 days.

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

Hewlett Packard Enterprise  vs.  Amkor Technology

Hewlett Packard Ente

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hewlett Packard Enterprise has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Hewlett Packard is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

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 Hewlett Packard and Amkor Technology

The main advantage of trading using opposite Hewlett Packard and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hewlett Packard 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 Hewlett Packard Enterprise 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.