Correlation Between Amkor Technology and SBM Offshore

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

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

Diversification Opportunities for Amkor Technology and SBM Offshore

-0.03

Correlation Coefficient

Amkor Technology  SBM Offshore

Good diversification

The 3 months correlation between Amkor and SBM is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and SBM Offshore NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBM Offshore NV 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 SBM Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBM Offshore NV has no effect on the direction of Amkor Technology i.e., Amkor Technology and SBM Offshore go up and down completely randomly.

Pair Corralation between Amkor Technology and SBM Offshore

Given the investment horizon of 90 days Amkor Technology is expected to under-perform the SBM Offshore. In addition to that, Amkor Technology is 1.19 times more volatile than SBM Offshore NV. It trades about -0.11 of its total potential returns per unit of risk. SBM Offshore NV is currently generating about -0.04 per unit of volatility. If you would invest  1,801  in SBM Offshore NV on September 26, 2024 and sell it today you would lose (101.00) from holding SBM Offshore NV or give up 5.61% of portfolio value over 90 days.

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

Amkor Technology  vs.  SBM Offshore NV

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.

SBM Offshore NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SBM Offshore NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, SBM Offshore is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amkor Technology and SBM Offshore

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

The idea behind Amkor Technology and SBM Offshore NV 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.