Correlation Between Amkor Technology and Harley Davidson

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

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

Diversification Opportunities for Amkor Technology and Harley Davidson

0.75

Correlation Coefficient

Amkor Technology  Harley Davidson

Poor diversification

The 3 months correlation between Amkor and Harley is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Harley Davidson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harley Davidson 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 Harley Davidson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harley Davidson has no effect on the direction of Amkor Technology i.e., Amkor Technology and Harley Davidson go up and down completely randomly.

Pair Corralation between Amkor Technology and Harley Davidson

Given the investment horizon of 90 days Amkor Technology is expected to generate 1.18 times more return on investment than Harley Davidson. However, Amkor Technology is 1.18 times more volatile than Harley Davidson. It trades about -0.08 of its potential returns per unit of risk. Harley Davidson is currently generating about -0.18 per unit of risk. If you would invest  3,033  in Amkor Technology on September 27, 2024 and sell it today you would lose (387.50) from holding Amkor Technology or give up 12.78% of portfolio value over 90 days.

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

Amkor Technology  vs.  Harley Davidson

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 latest inconsistent performance, the Stock's forward-looking signals remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Harley Davidson

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harley Davidson has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Amkor Technology and Harley Davidson

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

The idea behind Amkor Technology and Harley Davidson 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.