Correlation Between Monument Mining and Magnachip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Monument Mining 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 Monument Mining and Magnachip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monument Mining Limited and Magnachip Semiconductor, you can compare the effects of market volatilities on Monument Mining 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 Monument Mining with a short position of Magnachip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monument Mining and Magnachip Semiconductor.
Diversification Opportunities for Monument Mining and Magnachip Semiconductor
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Monument and Magnachip is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Monument Mining Limited and Magnachip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnachip Semiconductor and Monument Mining 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 Monument Mining Limited 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 Monument Mining i.e., Monument Mining and Magnachip Semiconductor go up and down completely randomly.
Pair Corralation between Monument Mining and Magnachip Semiconductor
Assuming the 90 days trading horizon Monument Mining Limited is expected to generate 2.03 times more return on investment than Magnachip Semiconductor. However, Monument Mining is 2.03 times more volatile than Magnachip Semiconductor. It trades about 0.15 of its potential returns per unit of risk. Magnachip Semiconductor is currently generating about -0.04 per unit of risk. If you would invest 9.20 in Monument Mining Limited on November 3, 2024 and sell it today you would earn a total of 12.80 from holding Monument Mining Limited or generate 139.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Monument Mining Limited vs. Magnachip Semiconductor
Performance |
| Timeline |
| Monument Mining |
| Magnachip Semiconductor |
Monument Mining and Magnachip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monument Mining and Magnachip Semiconductor
The main advantage of trading using opposite Monument Mining and Magnachip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monument Mining 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.| Monument Mining vs. ZIJIN MINH UNSPADR20 | Monument Mining vs. Newmont | Monument Mining vs. Barrick Gold | Monument Mining vs. Franco Nevada |
| Magnachip Semiconductor vs. GOLD ROAD RES | Magnachip Semiconductor vs. BJs Restaurants | Magnachip Semiconductor vs. Darden Restaurants | Magnachip Semiconductor vs. WESANA HEALTH HOLD |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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