Correlation Between ADRIATIC METALS and MagnaChip Semiconductor
Can any of the company-specific risk be diversified away by investing in both ADRIATIC METALS 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 ADRIATIC METALS and MagnaChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADRIATIC METALS LS 013355 and MagnaChip Semiconductor Corp, you can compare the effects of market volatilities on ADRIATIC METALS 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 ADRIATIC METALS with a short position of MagnaChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADRIATIC METALS and MagnaChip Semiconductor.
Diversification Opportunities for ADRIATIC METALS and MagnaChip Semiconductor
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between ADRIATIC and MagnaChip is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding ADRIATIC METALS LS 013355 and MagnaChip Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MagnaChip Semiconductor and ADRIATIC METALS 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 ADRIATIC METALS LS 013355 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 ADRIATIC METALS i.e., ADRIATIC METALS and MagnaChip Semiconductor go up and down completely randomly.
Pair Corralation between ADRIATIC METALS and MagnaChip Semiconductor
Assuming the 90 days trading horizon ADRIATIC METALS LS 013355 is expected to generate 1.95 times more return on investment than MagnaChip Semiconductor. However, ADRIATIC METALS is 1.95 times more volatile than MagnaChip Semiconductor Corp. It trades about 0.09 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 220.00 in ADRIATIC METALS LS 013355 on November 3, 2024 and sell it today you would earn a total of 12.00 from holding ADRIATIC METALS LS 013355 or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
ADRIATIC METALS LS 013355 vs. MagnaChip Semiconductor Corp
Performance |
| Timeline |
| ADRIATIC METALS LS |
| MagnaChip Semiconductor |
ADRIATIC METALS and MagnaChip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADRIATIC METALS and MagnaChip Semiconductor
The main advantage of trading using opposite ADRIATIC METALS and MagnaChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADRIATIC METALS 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.| ADRIATIC METALS vs. Rio Tinto Group | ADRIATIC METALS vs. Anglo American plc | ADRIATIC METALS vs. Mineral Resources Limited | ADRIATIC METALS vs. Liontown Resources Limited |
| MagnaChip Semiconductor vs. MHP Hotel AG | MagnaChip Semiconductor vs. HYATT HOTELS A | MagnaChip Semiconductor vs. ECHO INVESTMENT ZY | MagnaChip Semiconductor vs. Sunstone Hotel Investors |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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