Correlation Between Aegean Airlines and MagnaChip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines 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 Aegean Airlines and MagnaChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aegean Airlines SA and MagnaChip Semiconductor, you can compare the effects of market volatilities on Aegean Airlines 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 Aegean Airlines with a short position of MagnaChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and MagnaChip Semiconductor.
Diversification Opportunities for Aegean Airlines and MagnaChip Semiconductor
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aegean and MagnaChip is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA and MagnaChip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MagnaChip Semiconductor and Aegean Airlines 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 Aegean Airlines SA 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 Aegean Airlines i.e., Aegean Airlines and MagnaChip Semiconductor go up and down completely randomly.
Pair Corralation between Aegean Airlines and MagnaChip Semiconductor
Assuming the 90 days horizon Aegean Airlines SA is expected to generate 0.56 times more return on investment than MagnaChip Semiconductor. However, Aegean Airlines SA is 1.77 times less risky than MagnaChip Semiconductor. It trades about -0.22 of its potential returns per unit of risk. MagnaChip Semiconductor is currently generating about -0.16 per unit of risk. If you would invest 1,213 in Aegean Airlines SA on August 28, 2024 and sell it today you would lose (128.00) from holding Aegean Airlines SA or give up 10.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aegean Airlines SA vs. MagnaChip Semiconductor
Performance |
| Timeline |
| Aegean Airlines SA |
| MagnaChip Semiconductor |
Aegean Airlines and MagnaChip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and MagnaChip Semiconductor
The main advantage of trading using opposite Aegean Airlines and MagnaChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines 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.| Aegean Airlines vs. Copa Holdings SA | Aegean Airlines vs. United Airlines Holdings | Aegean Airlines vs. Delta Air Lines | Aegean Airlines vs. SkyWest |
| MagnaChip Semiconductor vs. CEVA Inc | MagnaChip Semiconductor vs. MACOM Technology Solutions | MagnaChip Semiconductor vs. FormFactor | MagnaChip Semiconductor vs. MaxLinear |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |