Correlation Between United Breweries and MagnaChip Semiconductor
Can any of the company-specific risk be diversified away by investing in both United Breweries 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 United Breweries and MagnaChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Breweries Co and MagnaChip Semiconductor Corp, you can compare the effects of market volatilities on United Breweries 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 United Breweries with a short position of MagnaChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Breweries and MagnaChip Semiconductor.
Diversification Opportunities for United Breweries and MagnaChip Semiconductor
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and MagnaChip is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding United Breweries Co and MagnaChip Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MagnaChip Semiconductor and United Breweries 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 United Breweries Co 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 United Breweries i.e., United Breweries and MagnaChip Semiconductor go up and down completely randomly.
Pair Corralation between United Breweries and MagnaChip Semiconductor
Assuming the 90 days trading horizon United Breweries Co is expected to generate 0.65 times more return on investment than MagnaChip Semiconductor. However, United Breweries Co is 1.54 times less risky than MagnaChip Semiconductor. It trades about 0.0 of its potential returns per unit of risk. MagnaChip Semiconductor Corp is currently generating about -0.06 per unit of risk. If you would invest 1,132 in United Breweries Co on September 14, 2024 and sell it today you would lose (42.00) from holding United Breweries Co or give up 3.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Breweries Co vs. MagnaChip Semiconductor Corp
Performance |
| Timeline |
| United Breweries |
| MagnaChip Semiconductor |
United Breweries and MagnaChip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Breweries and MagnaChip Semiconductor
The main advantage of trading using opposite United Breweries and MagnaChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Breweries 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.| United Breweries vs. National Retail Properties | United Breweries vs. EBRO FOODS | United Breweries vs. Cal Maine Foods | United Breweries vs. MARKET VECTR RETAIL |
| MagnaChip Semiconductor vs. QUEEN S ROAD | MagnaChip Semiconductor vs. Nordic Semiconductor ASA | MagnaChip Semiconductor vs. ELMOS SEMICONDUCTOR | MagnaChip Semiconductor vs. BII Railway Transportation |
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.
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