Correlation Between Enter Air and MagnaChip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Enter Air and MagnaChip Semiconductor 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 Enter Air and MagnaChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enter Air SA and MagnaChip Semiconductor Corp, you can compare the effects of market volatilities on Enter Air and MagnaChip Semiconductor 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 Enter Air with a short position of MagnaChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enter Air and MagnaChip Semiconductor.
Diversification Opportunities for Enter Air and MagnaChip Semiconductor
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enter and MagnaChip is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Enter Air SA and MagnaChip Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MagnaChip Semiconductor and Enter Air 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 Enter Air SA are associated (or correlated) with MagnaChip Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MagnaChip Semiconductor has no effect on the direction of Enter Air i.e., Enter Air and MagnaChip Semiconductor go up and down completely randomly.
Pair Corralation between Enter Air and MagnaChip Semiconductor
Assuming the 90 days trading horizon Enter Air SA is expected to generate 1.48 times more return on investment than MagnaChip Semiconductor. However, Enter Air is 1.48 times more volatile than MagnaChip Semiconductor Corp. It trades about 0.08 of its potential returns per unit of risk. MagnaChip Semiconductor Corp is currently generating about -0.07 per unit of risk. If you would invest 378.00 in Enter Air SA on September 3, 2024 and sell it today you would earn a total of 834.00 from holding Enter Air SA or generate 220.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enter Air SA vs. MagnaChip Semiconductor Corp
Performance |
| Timeline |
| Enter Air SA |
| MagnaChip Semiconductor |
Enter Air and MagnaChip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enter Air and MagnaChip Semiconductor
The main advantage of trading using opposite Enter Air and MagnaChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enter Air position performs unexpectedly, MagnaChip Semiconductor 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 MagnaChip Semiconductor will offset losses from the drop in MagnaChip Semiconductor's long position.| Enter Air vs. Uber Technologies | Enter Air vs. Playtech plc | Enter Air vs. Hyatt Hotels | Enter Air vs. HYATT HOTELS A |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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