Correlation Between Amkor Technology and Steven Madden

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

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

Diversification Opportunities for Amkor Technology and Steven Madden

0.85

Correlation Coefficient

Amkor Technology  Steven Madden

Very poor diversification

The 3 months correlation between Amkor and Steven is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Steven Madden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steven Madden 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 Steven Madden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steven Madden has no effect on the direction of Amkor Technology i.e., Amkor Technology and Steven Madden go up and down completely randomly.

Pair Corralation between Amkor Technology and Steven Madden

Given the investment horizon of 90 days Amkor Technology is expected to generate 1.4 times more return on investment than Steven Madden. However, Amkor Technology is 1.4 times more volatile than Steven Madden. It trades about -0.08 of its potential returns per unit of risk. Steven Madden is currently generating about -0.12 per unit of risk. If you would invest  3,005  in Amkor Technology on September 29, 2024 and sell it today you would lose (365.00) from holding Amkor Technology or give up 12.15% of portfolio value over 90 days.

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

Amkor Technology  vs.  Steven Madden

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.

Steven Madden

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Steven Madden has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Amkor Technology and Steven Madden

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

The idea behind Amkor Technology and Steven Madden 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..