Correlation Between Amkor Technology and Eagle Point

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

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

Diversification Opportunities for Amkor Technology and Eagle Point

-0.66

Correlation Coefficient

Amkor Technology  Eagle Point

Excellent diversification

The 3 months correlation between Amkor and Eagle is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Eagle Point Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Point Credit 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 Eagle Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Point Credit has no effect on the direction of Amkor Technology i.e., Amkor Technology and Eagle Point go up and down completely randomly.

Pair Corralation between Amkor Technology and Eagle Point

Given the investment horizon of 90 days Amkor Technology is expected to under-perform the Eagle Point. In addition to that, Amkor Technology is 8.35 times more volatile than Eagle Point Credit. It trades about -0.08 of its total potential returns per unit of risk. Eagle Point Credit is currently generating about 0.08 per unit of volatility. If you would invest  2,465  in Eagle Point Credit on September 26, 2024 and sell it today you would earn a total of  22.00  from holding Eagle Point Credit or generate 0.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.62%
Values	Daily Returns

Amkor Technology  vs.  Eagle Point Credit

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 weak 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.

Eagle Point Credit

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Point Credit are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Eagle Point is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Amkor Technology and Eagle Point

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

The idea behind Amkor Technology and Eagle Point Credit 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.