Correlation Between ANGLO ASIAN and Magnachip Semiconductor
Can any of the company-specific risk be diversified away by investing in both ANGLO ASIAN 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 ANGLO ASIAN and Magnachip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGLO ASIAN MINING and Magnachip Semiconductor, you can compare the effects of market volatilities on ANGLO ASIAN 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 ANGLO ASIAN with a short position of Magnachip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGLO ASIAN and Magnachip Semiconductor.
Diversification Opportunities for ANGLO ASIAN and Magnachip Semiconductor
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ANGLO and Magnachip is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding ANGLO ASIAN MINING and Magnachip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnachip Semiconductor and ANGLO ASIAN 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 ANGLO ASIAN MINING 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 ANGLO ASIAN i.e., ANGLO ASIAN and Magnachip Semiconductor go up and down completely randomly.
Pair Corralation between ANGLO ASIAN and Magnachip Semiconductor
Assuming the 90 days trading horizon ANGLO ASIAN MINING is expected to generate 1.17 times more return on investment than Magnachip Semiconductor. However, ANGLO ASIAN is 1.17 times more volatile than Magnachip Semiconductor. It trades about -0.03 of its potential returns per unit of risk. Magnachip Semiconductor is currently generating about -0.03 per unit of risk. If you would invest 125.00 in ANGLO ASIAN MINING on October 26, 2024 and sell it today you would lose (2.00) from holding ANGLO ASIAN MINING or give up 1.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGLO ASIAN MINING vs. Magnachip Semiconductor
Performance |
| Timeline |
| ANGLO ASIAN MINING |
| Magnachip Semiconductor |
ANGLO ASIAN and Magnachip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGLO ASIAN and Magnachip Semiconductor
The main advantage of trading using opposite ANGLO ASIAN and Magnachip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGLO ASIAN 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.| ANGLO ASIAN vs. Apple Inc | ANGLO ASIAN vs. Apple Inc | ANGLO ASIAN vs. Apple Inc | ANGLO ASIAN vs. Apple Inc |
| Magnachip Semiconductor vs. ANGLO ASIAN MINING | Magnachip Semiconductor vs. AIR PRODCHEMICALS | Magnachip Semiconductor vs. Monument Mining Limited | Magnachip Semiconductor vs. Corporate Travel Management |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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