Correlation Between Siamgas and MagnaChip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Siamgas 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 Siamgas and MagnaChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siamgas And Petrochemicals and MagnaChip Semiconductor Corp, you can compare the effects of market volatilities on Siamgas 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 Siamgas with a short position of MagnaChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siamgas and MagnaChip Semiconductor.
Diversification Opportunities for Siamgas and MagnaChip Semiconductor
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Siamgas and MagnaChip is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Siamgas And Petrochemicals and MagnaChip Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MagnaChip Semiconductor and Siamgas 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 Siamgas And Petrochemicals 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 Siamgas i.e., Siamgas and MagnaChip Semiconductor go up and down completely randomly.
Pair Corralation between Siamgas and MagnaChip Semiconductor
Assuming the 90 days trading horizon Siamgas And Petrochemicals is expected to generate 2.83 times more return on investment than MagnaChip Semiconductor. However, Siamgas is 2.83 times more volatile than MagnaChip Semiconductor Corp. It trades about 0.04 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 11.00 in Siamgas And Petrochemicals on September 23, 2024 and sell it today you would earn a total of 7.00 from holding Siamgas And Petrochemicals or generate 63.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siamgas And Petrochemicals vs. MagnaChip Semiconductor Corp
Performance |
| Timeline |
| Siamgas And Petroche |
| MagnaChip Semiconductor |
Siamgas and MagnaChip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siamgas and MagnaChip Semiconductor
The main advantage of trading using opposite Siamgas and MagnaChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siamgas 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.The idea behind Siamgas And Petrochemicals and MagnaChip Semiconductor Corp 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.| MagnaChip Semiconductor vs. Tower One Wireless | MagnaChip Semiconductor vs. WillScot Mobile Mini | MagnaChip Semiconductor vs. Ribbon Communications | MagnaChip Semiconductor vs. Chesapeake Utilities |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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