Correlation Between Microsoft and Amkor Technology

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

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

Diversification Opportunities for Microsoft and Amkor Technology

0.58

Correlation Coefficient

Microsoft  Amkor Technology

Very weak diversification

The 3 months correlation between Microsoft and Amkor is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and Microsoft 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 Microsoft 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 Microsoft i.e., Microsoft and Amkor Technology go up and down completely randomly.

Pair Corralation between Microsoft and Amkor Technology

Given the investment horizon of 90 days Microsoft is expected to generate 1.73 times less return on investment than Amkor Technology. But when comparing it to its historical volatility, Microsoft is 3.24 times less risky than Amkor Technology. It trades about 0.33 of its potential returns per unit of risk. Amkor Technology is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,572  in Amkor Technology on May 4, 2025 and sell it today you would earn a total of  579.00  from holding Amkor Technology or generate 36.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.38%
Values	Daily Returns

Microsoft  vs.  Amkor Technology

Microsoft

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Microsoft unveiled solid returns over the last few months and may actually be approaching a breakup point.

Amkor Technology

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amkor Technology are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Amkor Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Microsoft and Amkor Technology

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

Check out your portfolio center.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.