Correlation Between COMBA TELECOM and Magnachip Semiconductor
Can any of the company-specific risk be diversified away by investing in both COMBA TELECOM 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 COMBA TELECOM and Magnachip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COMBA TELECOM SYST and Magnachip Semiconductor, you can compare the effects of market volatilities on COMBA TELECOM 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 COMBA TELECOM with a short position of Magnachip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMBA TELECOM and Magnachip Semiconductor.
Diversification Opportunities for COMBA TELECOM and Magnachip Semiconductor
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between COMBA and Magnachip is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding COMBA TELECOM SYST and Magnachip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnachip Semiconductor and COMBA TELECOM 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 COMBA TELECOM SYST 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 COMBA TELECOM i.e., COMBA TELECOM and Magnachip Semiconductor go up and down completely randomly.
Pair Corralation between COMBA TELECOM and Magnachip Semiconductor
Assuming the 90 days trading horizon COMBA TELECOM SYST is expected to under-perform the Magnachip Semiconductor. In addition to that, COMBA TELECOM is 1.07 times more volatile than Magnachip Semiconductor. It trades about -0.35 of its total potential returns per unit of risk. Magnachip Semiconductor is currently generating about -0.06 per unit of volatility. If you would invest 396.00 in Magnachip Semiconductor on October 25, 2024 and sell it today you would lose (10.00) from holding Magnachip Semiconductor or give up 2.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COMBA TELECOM SYST vs. Magnachip Semiconductor
Performance |
| Timeline |
| COMBA TELECOM SYST |
| Magnachip Semiconductor |
COMBA TELECOM and Magnachip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COMBA TELECOM and Magnachip Semiconductor
The main advantage of trading using opposite COMBA TELECOM and Magnachip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMBA TELECOM 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.| COMBA TELECOM vs. Apple Inc | COMBA TELECOM vs. Apple Inc | COMBA TELECOM vs. Apple Inc | COMBA TELECOM vs. Apple Inc |
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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