Correlation Between Food Life and Magnachip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Food Life 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 Food Life and Magnachip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Food Life Companies and Magnachip Semiconductor, you can compare the effects of market volatilities on Food Life 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 Food Life with a short position of Magnachip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Food Life and Magnachip Semiconductor.
Diversification Opportunities for Food Life and Magnachip Semiconductor
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Food and Magnachip is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Food Life Companies and Magnachip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnachip Semiconductor and Food Life 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 Food Life Companies 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 Food Life i.e., Food Life and Magnachip Semiconductor go up and down completely randomly.
Pair Corralation between Food Life and Magnachip Semiconductor
Assuming the 90 days horizon Food Life Companies is expected to generate 0.88 times more return on investment than Magnachip Semiconductor. However, Food Life Companies is 1.14 times less risky than Magnachip Semiconductor. It trades about 0.04 of its potential returns per unit of risk. Magnachip Semiconductor is currently generating about -0.06 per unit of risk. If you would invest 1,810 in Food Life Companies on September 2, 2024 and sell it today you would earn a total of 330.00 from holding Food Life Companies or generate 18.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Food Life Companies vs. Magnachip Semiconductor
Performance |
| Timeline |
| Food Life Companies |
| Magnachip Semiconductor |
Food Life and Magnachip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Food Life and Magnachip Semiconductor
The main advantage of trading using opposite Food Life and Magnachip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Food Life 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.| Food Life vs. Insurance Australia Group | Food Life vs. United Insurance Holdings | Food Life vs. American Airlines Group | Food Life vs. SINGAPORE AIRLINES |
| Magnachip Semiconductor vs. Beyond Meat | Magnachip Semiconductor vs. Titan Machinery | Magnachip Semiconductor vs. Sterling Construction | Magnachip Semiconductor vs. AUSNUTRIA DAIRY |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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