Correlation Between Amkor Technology and Wolfspeed

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

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

Diversification Opportunities for Amkor Technology and Wolfspeed

-0.51

Correlation Coefficient

Amkor Technology  Wolfspeed

Excellent diversification

The 3 months correlation between Amkor and Wolfspeed is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Amkor Technology and Wolfspeed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wolfspeed 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 Wolfspeed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wolfspeed has no effect on the direction of Amkor Technology i.e., Amkor Technology and Wolfspeed go up and down completely randomly.

Pair Corralation between Amkor Technology and Wolfspeed

Given the investment horizon of 90 days Amkor Technology is expected to generate 1.79 times less return on investment than Wolfspeed. But when comparing it to its historical volatility, Amkor Technology is 7.09 times less risky than Wolfspeed. It trades about 0.12 of its potential returns per unit of risk. Wolfspeed is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  402.00  in Wolfspeed on May 6, 2025 and sell it today you would lose (250.00) from holding Wolfspeed or give up 62.19% of portfolio value over 90 days.

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

Amkor Technology  vs.  Wolfspeed

Amkor Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amkor Technology are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent forward-looking signals, Amkor Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Wolfspeed

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wolfspeed are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent essential indicators, Wolfspeed reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amkor Technology and Wolfspeed

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

The idea behind Amkor Technology and Wolfspeed 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.