Correlation Between Amkor Technology and Uber Technologies

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

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

Diversification Opportunities for Amkor Technology and Uber Technologies

-0.26

Correlation Coefficient

Amkor Technology  Uber Technologies

Very good diversification

The 3 months correlation between Amkor and Uber is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies 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 Uber Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies has no effect on the direction of Amkor Technology i.e., Amkor Technology and Uber Technologies go up and down completely randomly.

Pair Corralation between Amkor Technology and Uber Technologies

Assuming the 90 days horizon Amkor Technology is expected to generate 1.29 times less return on investment than Uber Technologies. In addition to that, Amkor Technology is 1.15 times more volatile than Uber Technologies. It trades about 0.21 of its total potential returns per unit of risk. Uber Technologies is currently generating about 0.32 per unit of volatility. If you would invest  5,922  in Uber Technologies on March 19, 2024 and sell it today you would earn a total of  617.00  from holding Uber Technologies or generate 10.42% return on investment over 90 days.

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

Amkor Technology  vs.  Uber Technologies

Amkor Technology

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amkor Technology are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Amkor Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Uber Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Uber Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Uber Technologies is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Amkor Technology and Uber Technologies

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

The idea behind Amkor Technology and Uber Technologies 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.