Correlation Between Fortress Transp and Amkor Technology

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Can any of the company-specific risk be diversified away by investing in both Fortress Transp 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 Fortress Transp and Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortress Transp Infra and Amkor Technology, you can compare the effects of market volatilities on Fortress Transp 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 Fortress Transp with a short position of Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortress Transp and Amkor Technology.

Diversification Opportunities for Fortress Transp and Amkor Technology

-0.42
  Correlation Coefficient

Very good diversification

The 3 months correlation between Fortress and Amkor is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Transp Infra and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and Fortress Transp 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 Fortress Transp Infra 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 Fortress Transp i.e., Fortress Transp and Amkor Technology go up and down completely randomly.

Pair Corralation between Fortress Transp and Amkor Technology

Given the investment horizon of 90 days Fortress Transp Infra is expected to generate 1.31 times more return on investment than Amkor Technology. However, Fortress Transp is 1.31 times more volatile than Amkor Technology. It trades about -0.01 of its potential returns per unit of risk. Amkor Technology is currently generating about -0.08 per unit of risk. If you would invest  13,265  in Fortress Transp Infra on September 29, 2024 and sell it today you would lose (554.00) from holding Fortress Transp Infra or give up 4.18% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Fortress Transp Infra  vs.  Amkor Technology

 Performance 
       Timeline  
Fortress Transp Infra 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Fortress Transp Infra has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Fortress Transp is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.
Amkor Technology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.

Fortress Transp and Amkor Technology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fortress Transp and Amkor Technology

The main advantage of trading using opposite Fortress Transp and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortress Transp 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 Fortress Transp Infra 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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