Correlation Between Wenzhou Kangning and MagnaChip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Wenzhou Kangning 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 Wenzhou Kangning and MagnaChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wenzhou Kangning Hospital and MagnaChip Semiconductor Corp, you can compare the effects of market volatilities on Wenzhou Kangning 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 Wenzhou Kangning with a short position of MagnaChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wenzhou Kangning and MagnaChip Semiconductor.
Diversification Opportunities for Wenzhou Kangning and MagnaChip Semiconductor
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wenzhou and MagnaChip is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Wenzhou Kangning Hospital and MagnaChip Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MagnaChip Semiconductor and Wenzhou Kangning 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 Wenzhou Kangning Hospital 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 Wenzhou Kangning i.e., Wenzhou Kangning and MagnaChip Semiconductor go up and down completely randomly.
Pair Corralation between Wenzhou Kangning and MagnaChip Semiconductor
Assuming the 90 days trading horizon Wenzhou Kangning Hospital is expected to under-perform the MagnaChip Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Wenzhou Kangning Hospital is 1.23 times less risky than MagnaChip Semiconductor. The stock trades about -0.25 of its potential returns per unit of risk. The MagnaChip Semiconductor Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 378.00 in MagnaChip Semiconductor Corp on October 15, 2024 and sell it today you would earn a total of 10.00 from holding MagnaChip Semiconductor Corp or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wenzhou Kangning Hospital vs. MagnaChip Semiconductor Corp
Performance |
| Timeline |
| Wenzhou Kangning Hospital |
| MagnaChip Semiconductor |
Wenzhou Kangning and MagnaChip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wenzhou Kangning and MagnaChip Semiconductor
The main advantage of trading using opposite Wenzhou Kangning and MagnaChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wenzhou Kangning 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.| Wenzhou Kangning vs. Pentair plc | Wenzhou Kangning vs. Molina Healthcare | Wenzhou Kangning vs. Air New Zealand | Wenzhou Kangning vs. MYFAIR GOLD P |
| MagnaChip Semiconductor vs. MCEWEN MINING INC | MagnaChip Semiconductor vs. RCI Hospitality Holdings | MagnaChip Semiconductor vs. Wenzhou Kangning Hospital | MagnaChip Semiconductor vs. YOOMA WELLNESS INC |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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