Correlation Between Eagle Point and Amkor Technology

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

By analyzing existing cross correlation between Eagle Point Credit and Amkor Technology, you can compare the effects of market volatilities on Eagle Point and Amkor Technology 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 Eagle Point with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Point and Amkor Technology.

Diversification Opportunities for Eagle Point and Amkor Technology

-0.66

Correlation Coefficient

Eagle Point  Amkor Technology

Excellent diversification

The 3 months correlation between Eagle and Amkor is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Point Credit and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and Eagle Point 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 Eagle Point Credit are associated (or correlated) with Amkor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amkor Technology has no effect on the direction of Eagle Point i.e., Eagle Point and Amkor Technology go up and down completely randomly.

Pair Corralation between Eagle Point and Amkor Technology

Given the investment horizon of 90 days Eagle Point Credit is expected to generate 0.12 times more return on investment than Amkor Technology. However, Eagle Point Credit is 8.35 times less risky than Amkor Technology. It trades about 0.08 of its potential returns per unit of risk. Amkor Technology is currently generating about -0.08 per unit of risk. If you would invest  2,465  in Eagle Point Credit on September 26, 2024 and sell it today you would earn a total of  22.00  from holding Eagle Point Credit or generate 0.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.62%
Values	Daily Returns

Eagle Point Credit  vs.  Amkor Technology

Eagle Point Credit

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Point Credit are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Eagle Point is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

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.

Pair Trading with Eagle Point and Amkor Technology

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

The idea behind Eagle Point Credit and Amkor Technology 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.

Check out your portfolio center.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.