Correlation Between ChipMOS Technologies and Ambarella

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

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

Diversification Opportunities for ChipMOS Technologies and Ambarella

0.33

Correlation Coefficient

ChipMOS Technologies  Ambarella

Weak diversification

The 3 months correlation between ChipMOS and Ambarella is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding ChipMOS Technologies and Ambarella in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambarella and ChipMOS Technologies 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 ChipMOS Technologies are associated (or correlated) with Ambarella. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambarella has no effect on the direction of ChipMOS Technologies i.e., ChipMOS Technologies and Ambarella go up and down completely randomly.

Pair Corralation between ChipMOS Technologies and Ambarella

Given the investment horizon of 90 days ChipMOS Technologies is expected to generate 3.74 times less return on investment than Ambarella. But when comparing it to its historical volatility, ChipMOS Technologies is 1.95 times less risky than Ambarella. It trades about 0.09 of its potential returns per unit of risk. Ambarella is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  4,799  in Ambarella on April 30, 2025 and sell it today you would earn a total of  2,200  from holding Ambarella or generate 45.84% return on investment over 90 days.

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

ChipMOS Technologies  vs.  Ambarella

ChipMOS Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ChipMOS Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, ChipMOS Technologies may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Ambarella

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ambarella are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental drivers, Ambarella sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ChipMOS Technologies and Ambarella

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

The idea behind ChipMOS Technologies and Ambarella 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.