Correlation Between Amkor Technology and CITIC Telecom

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

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

Diversification Opportunities for Amkor Technology and CITIC Telecom

0.6

Correlation Coefficient

Amkor Technology  CITIC Telecom

Poor diversification

The 3 months correlation between Amkor and CITIC is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and CITIC Telecom International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Telecom Intern 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 CITIC Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Telecom Intern has no effect on the direction of Amkor Technology i.e., Amkor Technology and CITIC Telecom go up and down completely randomly.

Pair Corralation between Amkor Technology and CITIC Telecom

Assuming the 90 days horizon Amkor Technology is expected to generate 0.77 times more return on investment than CITIC Telecom. However, Amkor Technology is 1.3 times less risky than CITIC Telecom. It trades about 0.15 of its potential returns per unit of risk. CITIC Telecom International is currently generating about 0.07 per unit of risk. If you would invest  1,426  in Amkor Technology on April 23, 2025 and sell it today you would earn a total of  399.00  from holding Amkor Technology or generate 27.98% return on investment over 90 days.

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

Amkor Technology  vs.  CITIC Telecom International

Amkor Technology

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amkor Technology are ranked lower than 11 (%) 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.

CITIC Telecom Intern

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CITIC Telecom International are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CITIC Telecom reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amkor Technology and CITIC Telecom

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

The idea behind Amkor Technology and CITIC Telecom International 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.