Correlation Between Amkor Technology and Sonida Senior

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

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

Diversification Opportunities for Amkor Technology and Sonida Senior

0.34

Correlation Coefficient

Amkor Technology  Sonida Senior

Weak diversification

The 3 months correlation between Amkor and Sonida is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Sonida Senior Living in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonida Senior Living 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 Sonida Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonida Senior Living has no effect on the direction of Amkor Technology i.e., Amkor Technology and Sonida Senior go up and down completely randomly.

Pair Corralation between Amkor Technology and Sonida Senior

Given the investment horizon of 90 days Amkor Technology is expected to under-perform the Sonida Senior. But the stock apears to be less risky and, when comparing its historical volatility, Amkor Technology is 1.36 times less risky than Sonida Senior. The stock trades about -0.11 of its potential returns per unit of risk. The Sonida Senior Living is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  2,624  in Sonida Senior Living on September 26, 2024 and sell it today you would lose (313.00) from holding Sonida Senior Living or give up 11.93% of portfolio value over 90 days.

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

Amkor Technology  vs.  Sonida Senior Living

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.

Sonida Senior Living

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sonida Senior Living has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Amkor Technology and Sonida Senior

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

The idea behind Amkor Technology and Sonida Senior Living 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.