Correlation Between RADIATE and Amkor Technology

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

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

Diversification Opportunities for RADIATE and Amkor Technology

-0.29

Correlation Coefficient

RADIATE  Amkor Technology

Very good diversification

The 3 months correlation between RADIATE and Amkor is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding RADIATE HOLDCO LLC and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and RADIATE 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 RADIATE HOLDCO LLC 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 RADIATE i.e., RADIATE and Amkor Technology go up and down completely randomly.

Pair Corralation between RADIATE and Amkor Technology

Assuming the 90 days trading horizon RADIATE HOLDCO LLC is expected to under-perform the Amkor Technology. In addition to that, RADIATE is 10.42 times more volatile than Amkor Technology. It trades about -0.09 of its total potential returns per unit of risk. Amkor Technology is currently generating about 0.0 per unit of volatility. If you would invest  2,679  in Amkor Technology on October 9, 2024 and sell it today you would lose (6.00) from holding Amkor Technology or give up 0.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	47.37%
Values	Daily Returns

RADIATE HOLDCO LLC  vs.  Amkor Technology

RADIATE HOLDCO LLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RADIATE HOLDCO LLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for RADIATE HOLDCO LLC investors.

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. Even with latest inconsistent performance, the Stock's forward-looking signals remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with RADIATE and Amkor Technology

The main advantage of trading using opposite RADIATE and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RADIATE 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 RADIATE HOLDCO LLC 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.