Correlation Between Accent Resources and MagnaChip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Accent Resources 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 Accent Resources and MagnaChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accent Resources NL and MagnaChip Semiconductor Corp, you can compare the effects of market volatilities on Accent Resources 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 Accent Resources with a short position of MagnaChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accent Resources and MagnaChip Semiconductor.
Diversification Opportunities for Accent Resources and MagnaChip Semiconductor
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Accent and MagnaChip is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Accent Resources NL and MagnaChip Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MagnaChip Semiconductor and Accent Resources 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 Accent Resources NL 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 Accent Resources i.e., Accent Resources and MagnaChip Semiconductor go up and down completely randomly.
Pair Corralation between Accent Resources and MagnaChip Semiconductor
Assuming the 90 days horizon Accent Resources NL is expected to generate 4.34 times more return on investment than MagnaChip Semiconductor. However, Accent Resources is 4.34 times more volatile than MagnaChip Semiconductor Corp. It trades about 0.19 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 1.10 in Accent Resources NL on September 14, 2024 and sell it today you would earn a total of 0.60 from holding Accent Resources NL or generate 54.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Accent Resources NL vs. MagnaChip Semiconductor Corp
Performance |
| Timeline |
| Accent Resources |
| MagnaChip Semiconductor |
Accent Resources and MagnaChip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Accent Resources and MagnaChip Semiconductor
The main advantage of trading using opposite Accent Resources and MagnaChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accent Resources 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.| Accent Resources vs. MagnaChip Semiconductor Corp | Accent Resources vs. VARIOUS EATERIES LS | Accent Resources vs. Taiwan Semiconductor Manufacturing | Accent Resources vs. PLAYTIKA HOLDING DL 01 |
| MagnaChip Semiconductor vs. QUEEN S ROAD | MagnaChip Semiconductor vs. Nordic Semiconductor ASA | MagnaChip Semiconductor vs. ELMOS SEMICONDUCTOR | MagnaChip Semiconductor vs. BII Railway Transportation |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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