Correlation Between Launch One and Amkor Technology

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

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

Diversification Opportunities for Launch One and Amkor Technology

-0.55

Correlation Coefficient

Launch One  Amkor Technology

Excellent diversification

The 3 months correlation between Launch and Amkor is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Launch One Acquisition and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and Launch One 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 Launch One Acquisition 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 Launch One i.e., Launch One and Amkor Technology go up and down completely randomly.

Pair Corralation between Launch One and Amkor Technology

Assuming the 90 days horizon Launch One Acquisition is expected to generate 0.13 times more return on investment than Amkor Technology. However, Launch One Acquisition is 7.79 times less risky than Amkor Technology. It trades about 0.06 of its potential returns per unit of risk. Amkor Technology is currently generating about -0.14 per unit of risk. If you would invest  1,008  in Launch One Acquisition on December 19, 2024 and sell it today you would earn a total of  12.00  from holding Launch One Acquisition or generate 1.19% return on investment over 90 days.

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

Launch One Acquisition  vs.  Amkor Technology

Launch One Acquisition

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Launch One Acquisition are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Launch One is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private 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 Launch One and Amkor Technology

The main advantage of trading using opposite Launch One and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Launch One 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 Launch One Acquisition 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.