Correlation Between Amkor Technology and Ameriprise Financial

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

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

Diversification Opportunities for Amkor Technology and Ameriprise Financial

-0.63

Correlation Coefficient

Amkor Technology  Ameriprise Financial

Excellent diversification

The 3 months correlation between Amkor and Ameriprise is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and Amkor Technology 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 Amkor Technology are associated (or correlated) with Ameriprise Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameriprise Financial has no effect on the direction of Amkor Technology i.e., Amkor Technology and Ameriprise Financial go up and down completely randomly.

Pair Corralation between Amkor Technology and Ameriprise Financial

Assuming the 90 days horizon Amkor Technology is expected to under-perform the Ameriprise Financial. In addition to that, Amkor Technology is 1.19 times more volatile than Ameriprise Financial. It trades about -0.06 of its total potential returns per unit of risk. Ameriprise Financial is currently generating about 0.25 per unit of volatility. If you would invest  39,694  in Ameriprise Financial on September 3, 2024 and sell it today you would earn a total of  14,506  from holding Ameriprise Financial or generate 36.54% return on investment over 90 days.

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

Amkor Technology  vs.  Ameriprise Financial

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.

Ameriprise Financial

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ameriprise Financial are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Ameriprise Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amkor Technology and Ameriprise Financial

The main advantage of trading using opposite Amkor Technology and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amkor Technology position performs unexpectedly, Ameriprise Financial 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 Ameriprise Financial will offset losses from the drop in Ameriprise Financial's long position.

The idea behind Amkor Technology and Ameriprise Financial 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.