Correlation Between Polski Koncern and Amkor Technology

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

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

Diversification Opportunities for Polski Koncern and Amkor Technology

0.65

Correlation Coefficient

Polski Koncern  Amkor Technology

Poor diversification

The 3 months correlation between Polski and Amkor is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Polski Koncern Naftowy and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and Polski Koncern 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 Polski Koncern Naftowy 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 Polski Koncern i.e., Polski Koncern and Amkor Technology go up and down completely randomly.

Pair Corralation between Polski Koncern and Amkor Technology

Assuming the 90 days trading horizon Polski Koncern Naftowy is expected to under-perform the Amkor Technology. But the stock apears to be less risky and, when comparing its historical volatility, Polski Koncern Naftowy is 1.11 times less risky than Amkor Technology. The stock trades about -0.08 of its potential returns per unit of risk. The Amkor Technology is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  2,755  in Amkor Technology on October 5, 2024 and sell it today you would lose (272.00) from holding Amkor Technology or give up 9.87% of portfolio value over 90 days.

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

Polski Koncern Naftowy  vs.  Amkor Technology

Polski Koncern Naftowy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Polski Koncern Naftowy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company 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. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Polski Koncern and Amkor Technology

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