Correlation Between Cass Information and Magnachip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Cass Information 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 Cass Information and Magnachip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cass Information Systems and Magnachip Semiconductor, you can compare the effects of market volatilities on Cass Information 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 Cass Information with a short position of Magnachip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cass Information and Magnachip Semiconductor.
Diversification Opportunities for Cass Information and Magnachip Semiconductor
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cass and Magnachip is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Cass Information Systems and Magnachip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnachip Semiconductor and Cass Information 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 Cass Information Systems 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 Cass Information i.e., Cass Information and Magnachip Semiconductor go up and down completely randomly.
Pair Corralation between Cass Information and Magnachip Semiconductor
Assuming the 90 days horizon Cass Information Systems is expected to under-perform the Magnachip Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Cass Information Systems is 3.06 times less risky than Magnachip Semiconductor. The stock trades about -0.08 of its potential returns per unit of risk. The Magnachip Semiconductor is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 346.00 in Magnachip Semiconductor on September 13, 2024 and sell it today you would earn a total of 42.00 from holding Magnachip Semiconductor or generate 12.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Cass Information Systems vs. Magnachip Semiconductor
Performance |
| Timeline |
| Cass Information Systems |
| Magnachip Semiconductor |
Cass Information and Magnachip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cass Information and Magnachip Semiconductor
The main advantage of trading using opposite Cass Information and Magnachip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cass Information 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.| Cass Information vs. Media and Games | Cass Information vs. SOLSTAD OFFSHORE NK | Cass Information vs. ANGLER GAMING PLC | Cass Information vs. WT OFFSHORE |
| Magnachip Semiconductor vs. LION ONE METALS | Magnachip Semiconductor vs. EMBARK EDUCATION LTD | Magnachip Semiconductor vs. Grand Canyon Education | Magnachip Semiconductor vs. Perdoceo Education |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |