Correlation Between Cohu and Amkor Technology

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

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

Diversification Opportunities for Cohu and Amkor Technology

0.23

Correlation Coefficient

Cohu  Amkor Technology

Modest diversification

The 3 months correlation between Cohu and Amkor is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Cohu Inc and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and Cohu 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 Cohu Inc 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 Cohu i.e., Cohu and Amkor Technology go up and down completely randomly.

Pair Corralation between Cohu and Amkor Technology

Given the investment horizon of 90 days Cohu is expected to generate 5.8 times less return on investment than Amkor Technology. But when comparing it to its historical volatility, Cohu Inc is 1.37 times less risky than Amkor Technology. It trades about 0.02 of its potential returns per unit of risk. Amkor Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  3,028  in Amkor Technology on February 28, 2024 and sell it today you would earn a total of  282.00  from holding Amkor Technology or generate 9.31% return on investment over 90 days.

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

Cohu Inc  vs.  Amkor Technology

Cohu Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cohu Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical indicators, Cohu is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Amkor Technology

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amkor Technology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady forward-looking signals, Amkor Technology may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Cohu and Amkor Technology

The main advantage of trading using opposite Cohu and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohu 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 Cohu Inc 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.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.