Correlation Between NETGEAR and Amkor Technology

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

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

Diversification Opportunities for NETGEAR and Amkor Technology

-0.29

Correlation Coefficient

NETGEAR  Amkor Technology

Very good diversification

The 3 months correlation between NETGEAR and Amkor is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology and NETGEAR 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 NETGEAR 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 NETGEAR i.e., NETGEAR and Amkor Technology go up and down completely randomly.

Pair Corralation between NETGEAR and Amkor Technology

Given the investment horizon of 90 days NETGEAR is expected to under-perform the Amkor Technology. But the stock apears to be less risky and, when comparing its historical volatility, NETGEAR is 1.36 times less risky than Amkor Technology. The stock trades about -0.03 of its potential returns per unit of risk. The Amkor Technology is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  2,533  in Amkor Technology on September 11, 2025 and sell it today you would earn a total of  1,928  from holding Amkor Technology or generate 76.12% return on investment over 90 days.

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

NETGEAR  vs.  Amkor Technology

NETGEAR

Risk-Adjusted Performance

Weakest

Over the last 90 days NETGEAR has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, NETGEAR is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Amkor Technology

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amkor Technology are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting forward-looking signals, Amkor Technology reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NETGEAR and Amkor Technology

The main advantage of trading using opposite NETGEAR and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NETGEAR 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 NETGEAR 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.