Correlation Between Amkor Technology and GMS

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

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

Diversification Opportunities for Amkor Technology and GMS

-0.43

Correlation Coefficient

Amkor Technology  GMS

Very good diversification

The 3 months correlation between Amkor and GMS is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and GMS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMS Inc 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 GMS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMS Inc has no effect on the direction of Amkor Technology i.e., Amkor Technology and GMS go up and down completely randomly.

Pair Corralation between Amkor Technology and GMS

Given the investment horizon of 90 days Amkor Technology is expected to generate 1.09 times more return on investment than GMS. However, Amkor Technology is 1.09 times more volatile than GMS Inc. It trades about -0.07 of its potential returns per unit of risk. GMS Inc is currently generating about -0.46 per unit of risk. If you would invest  2,606  in Amkor Technology on September 23, 2024 and sell it today you would lose (79.00) from holding Amkor Technology or give up 3.03% of portfolio value over 90 days.

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

Amkor Technology  vs.  GMS Inc

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.

GMS Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GMS Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, GMS is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Amkor Technology and GMS

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

The idea behind Amkor Technology and GMS Inc 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.