Correlation Between Amkor Technology and ZOETIS

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

By analyzing existing cross correlation between Amkor Technology and ZOETIS INC 45, you can compare the effects of market volatilities on Amkor Technology and ZOETIS 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 ZOETIS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amkor Technology and ZOETIS.

Diversification Opportunities for Amkor Technology and ZOETIS

0.28

Correlation Coefficient

Amkor Technology  ZOETIS

Modest diversification

The 3 months correlation between Amkor and ZOETIS is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and ZOETIS INC 45 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZOETIS INC 45 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 ZOETIS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZOETIS INC 45 has no effect on the direction of Amkor Technology i.e., Amkor Technology and ZOETIS go up and down completely randomly.

Pair Corralation between Amkor Technology and ZOETIS

Given the investment horizon of 90 days Amkor Technology is expected to generate 12.49 times more return on investment than ZOETIS. However, Amkor Technology is 12.49 times more volatile than ZOETIS INC 45. It trades about 0.04 of its potential returns per unit of risk. ZOETIS INC 45 is currently generating about 0.07 per unit of risk. If you would invest  2,600  in Amkor Technology on September 13, 2024 and sell it today you would earn a total of  38.00  from holding Amkor Technology or generate 1.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Amkor Technology  vs.  ZOETIS INC 45

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.

ZOETIS INC 45

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZOETIS INC 45 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ZOETIS is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Amkor Technology and ZOETIS

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

The idea behind Amkor Technology and ZOETIS INC 45 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..