Correlation Between Amkor Technology and Biocardia

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

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

Diversification Opportunities for Amkor Technology and Biocardia

0.82

Correlation Coefficient

Amkor Technology  Biocardia

Very poor diversification

The 3 months correlation between Amkor and Biocardia is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Biocardia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biocardia 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 Biocardia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biocardia has no effect on the direction of Amkor Technology i.e., Amkor Technology and Biocardia go up and down completely randomly.

Pair Corralation between Amkor Technology and Biocardia

Given the investment horizon of 90 days Amkor Technology is expected to generate 0.27 times more return on investment than Biocardia. However, Amkor Technology is 3.66 times less risky than Biocardia. It trades about 0.02 of its potential returns per unit of risk. Biocardia is currently generating about -0.02 per unit of risk. If you would invest  2,455  in Amkor Technology on September 23, 2024 and sell it today you would earn a total of  72.00  from holding Amkor Technology or generate 2.93% return on investment over 90 days.

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

Amkor Technology  vs.  Biocardia

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 unsteady performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Biocardia

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Amkor Technology and Biocardia

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

The idea behind Amkor Technology and Biocardia 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.