Correlation Between POWR Lithium and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both POWR Lithium 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 POWR Lithium and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between POWR Lithium Corp and Amkor Technology, you can compare the effects of market volatilities on POWR Lithium 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 POWR Lithium with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of POWR Lithium and Amkor Technology.
Diversification Opportunities for POWR Lithium and Amkor Technology
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between POWR and Amkor is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding POWR Lithium Corp and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and POWR Lithium 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 POWR Lithium Corp 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 POWR Lithium i.e., POWR Lithium and Amkor Technology go up and down completely randomly.
Pair Corralation between POWR Lithium and Amkor Technology
Assuming the 90 days horizon POWR Lithium Corp is expected to generate 8.1 times more return on investment than Amkor Technology. However, POWR Lithium is 8.1 times more volatile than Amkor Technology. It trades about 0.05 of its potential returns per unit of risk. Amkor Technology is currently generating about -0.17 per unit of risk. If you would invest 5.90 in POWR Lithium Corp on December 4, 2024 and sell it today you would lose (2.90) from holding POWR Lithium Corp or give up 49.15% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.16% |
Values | Daily Returns |
POWR Lithium Corp vs. Amkor Technology
Performance |
Timeline |
POWR Lithium Corp |
Amkor Technology |
POWR Lithium and Amkor Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with POWR Lithium and Amkor Technology
The main advantage of trading using opposite POWR Lithium and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if POWR Lithium 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.POWR Lithium vs. Tianjin Capital Environmental | POWR Lithium vs. Ternium SA ADR | POWR Lithium vs. ArcelorMittal SA ADR | POWR Lithium vs. Allegheny Technologies Incorporated |
Amkor Technology vs. Power Integrations | Amkor Technology vs. Diodes Incorporated | Amkor Technology vs. MACOM Technology Solutions | Amkor Technology vs. Cirrus Logic |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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