Correlation Between HF FOODS and MagnaChip Semiconductor
Can any of the company-specific risk be diversified away by investing in both HF FOODS 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 HF FOODS and MagnaChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HF FOODS GRP and MagnaChip Semiconductor Corp, you can compare the effects of market volatilities on HF FOODS 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 HF FOODS with a short position of MagnaChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of HF FOODS and MagnaChip Semiconductor.
Diversification Opportunities for HF FOODS and MagnaChip Semiconductor
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 3GX and MagnaChip is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding HF FOODS GRP and MagnaChip Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MagnaChip Semiconductor and HF FOODS 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 HF FOODS GRP 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 HF FOODS i.e., HF FOODS and MagnaChip Semiconductor go up and down completely randomly.
Pair Corralation between HF FOODS and MagnaChip Semiconductor
Assuming the 90 days horizon HF FOODS GRP is expected to generate 1.48 times more return on investment than MagnaChip Semiconductor. However, HF FOODS is 1.48 times more volatile than MagnaChip Semiconductor Corp. It trades about 0.01 of its potential returns per unit of risk. MagnaChip Semiconductor Corp is currently generating about -0.06 per unit of risk. If you would invest 382.00 in HF FOODS GRP on September 4, 2024 and sell it today you would lose (42.00) from holding HF FOODS GRP or give up 10.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
HF FOODS GRP vs. MagnaChip Semiconductor Corp
Performance |
| Timeline |
| HF FOODS GRP |
| MagnaChip Semiconductor |
HF FOODS and MagnaChip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HF FOODS and MagnaChip Semiconductor
The main advantage of trading using opposite HF FOODS and MagnaChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HF FOODS 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.| HF FOODS vs. Performance Food Group | HF FOODS vs. Superior Plus Corp | HF FOODS vs. NMI Holdings | HF FOODS vs. Origin Agritech |
| MagnaChip Semiconductor vs. VIRGIN WINES UK | MagnaChip Semiconductor vs. CHINA TONTINE WINES | MagnaChip Semiconductor vs. TROPHY GAMES DEV | MagnaChip Semiconductor vs. NAKED WINES PLC |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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