Correlation Between Cohu and MagnaChip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Cohu 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 Cohu and MagnaChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cohu Inc and MagnaChip Semiconductor, you can compare the effects of market volatilities on Cohu 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 Cohu with a short position of MagnaChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cohu and MagnaChip Semiconductor.
Diversification Opportunities for Cohu and MagnaChip Semiconductor
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cohu and MagnaChip is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Cohu Inc and MagnaChip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MagnaChip Semiconductor and Cohu 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 Cohu Inc 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 Cohu i.e., Cohu and MagnaChip Semiconductor go up and down completely randomly.
Pair Corralation between Cohu and MagnaChip Semiconductor
Given the investment horizon of 90 days Cohu Inc is expected to generate 0.79 times more return on investment than MagnaChip Semiconductor. However, Cohu Inc is 1.27 times less risky than MagnaChip Semiconductor. It trades about 0.02 of its potential returns per unit of risk. MagnaChip Semiconductor is currently generating about -0.04 per unit of risk. If you would invest 2,595 in Cohu Inc on August 31, 2024 and sell it today you would earn a total of 3.00 from holding Cohu Inc or generate 0.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cohu Inc vs. MagnaChip Semiconductor
Performance |
| Timeline |
| Cohu Inc |
| MagnaChip Semiconductor |
Cohu and MagnaChip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cohu and MagnaChip Semiconductor
The main advantage of trading using opposite Cohu and MagnaChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cohu 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.| Cohu vs. Onto Innovation | Cohu vs. Photronics | Cohu vs. Ultra Clean Holdings | Cohu vs. Axcelis Technologies |
| MagnaChip Semiconductor vs. MACOM Technology Solutions | MagnaChip Semiconductor vs. FormFactor | MagnaChip Semiconductor vs. MaxLinear | MagnaChip Semiconductor vs. nLIGHT Inc |
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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