Correlation Between BORR DRILLING and MagnaChip Semiconductor
Can any of the company-specific risk be diversified away by investing in both BORR DRILLING 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 BORR DRILLING and MagnaChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BORR DRILLING NEW and MagnaChip Semiconductor Corp, you can compare the effects of market volatilities on BORR DRILLING 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 BORR DRILLING with a short position of MagnaChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of BORR DRILLING and MagnaChip Semiconductor.
Diversification Opportunities for BORR DRILLING and MagnaChip Semiconductor
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BORR and MagnaChip is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding BORR DRILLING NEW and MagnaChip Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MagnaChip Semiconductor and BORR DRILLING 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 BORR DRILLING NEW 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 BORR DRILLING i.e., BORR DRILLING and MagnaChip Semiconductor go up and down completely randomly.
Pair Corralation between BORR DRILLING and MagnaChip Semiconductor
Assuming the 90 days horizon BORR DRILLING NEW is expected to generate 1.23 times more return on investment than MagnaChip Semiconductor. However, BORR DRILLING is 1.23 times more volatile than MagnaChip Semiconductor Corp. It trades about -0.01 of its potential returns per unit of risk. MagnaChip Semiconductor Corp is currently generating about -0.05 per unit of risk. If you would invest 494.00 in BORR DRILLING NEW on September 21, 2024 and sell it today you would lose (117.00) from holding BORR DRILLING NEW or give up 23.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BORR DRILLING NEW vs. MagnaChip Semiconductor Corp
Performance |
| Timeline |
| BORR DRILLING NEW |
| MagnaChip Semiconductor |
BORR DRILLING and MagnaChip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BORR DRILLING and MagnaChip Semiconductor
The main advantage of trading using opposite BORR DRILLING and MagnaChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BORR DRILLING 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.| BORR DRILLING vs. Nabors Industries | BORR DRILLING vs. PRECISION DRILLING P | BORR DRILLING vs. Daldrup Shne Aktiengesellschaft |
| MagnaChip Semiconductor vs. FAST RETAIL ADR | MagnaChip Semiconductor vs. NXP Semiconductors NV | MagnaChip Semiconductor vs. Nordic Semiconductor ASA | MagnaChip Semiconductor vs. Carsales |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |