Correlation Between Amkor Technology and Transportadora

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

By analyzing existing cross correlation between Amkor Technology and Transportadora de Gas, you can compare the effects of market volatilities on Amkor Technology and Transportadora 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 Transportadora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and Transportadora.

Diversification Opportunities for Amkor Technology and Transportadora

-0.72

Correlation Coefficient

Amkor Technology  Transportadora

Pay attention - limited upside

The 3 months correlation between Amkor and Transportadora is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Transportadora de Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transportadora de Gas 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 Transportadora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transportadora de Gas has no effect on the direction of Amkor Technology i.e., Amkor Technology and Transportadora go up and down completely randomly.

Pair Corralation between Amkor Technology and Transportadora

Assuming the 90 days horizon Amkor Technology is expected to under-perform the Transportadora. But the stock apears to be less risky and, when comparing its historical volatility, Amkor Technology is 1.9 times less risky than Transportadora. The stock trades about -0.05 of its potential returns per unit of risk. The Transportadora de Gas is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,790  in Transportadora de Gas on September 21, 2024 and sell it today you would earn a total of  990.00  from holding Transportadora de Gas or generate 55.31% 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.  Transportadora de Gas

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.

Transportadora de Gas

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Transportadora de Gas are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward-looking signals, Transportadora reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amkor Technology and Transportadora

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

The idea behind Amkor Technology and Transportadora de Gas 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.