Correlation Between Diamyd Medical and MagnaChip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Diamyd Medical 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 Diamyd Medical and MagnaChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diamyd Medical AB and MagnaChip Semiconductor Corp, you can compare the effects of market volatilities on Diamyd Medical 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 Diamyd Medical with a short position of MagnaChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and MagnaChip Semiconductor.
Diversification Opportunities for Diamyd Medical and MagnaChip Semiconductor
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Diamyd and MagnaChip is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB and MagnaChip Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MagnaChip Semiconductor and Diamyd Medical 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 Diamyd Medical AB 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 Diamyd Medical i.e., Diamyd Medical and MagnaChip Semiconductor go up and down completely randomly.
Pair Corralation between Diamyd Medical and MagnaChip Semiconductor
Assuming the 90 days horizon Diamyd Medical AB is expected to generate 1.89 times more return on investment than MagnaChip Semiconductor. However, Diamyd Medical is 1.89 times more volatile than MagnaChip Semiconductor Corp. It trades about 0.01 of its potential returns per unit of risk. MagnaChip Semiconductor Corp is currently generating about -0.19 per unit of risk. If you would invest 145.00 in Diamyd Medical AB on November 4, 2024 and sell it today you would earn a total of 0.00 from holding Diamyd Medical AB or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamyd Medical AB vs. MagnaChip Semiconductor Corp
Performance |
| Timeline |
| Diamyd Medical AB |
| MagnaChip Semiconductor |
Diamyd Medical and MagnaChip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and MagnaChip Semiconductor
The main advantage of trading using opposite Diamyd Medical and MagnaChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd Medical 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.| Diamyd Medical vs. Charter Communications | Diamyd Medical vs. STORE ELECTRONIC | Diamyd Medical vs. Hemisphere Energy Corp | Diamyd Medical vs. ecotel communication ag |
| MagnaChip Semiconductor vs. MHP Hotel AG | MagnaChip Semiconductor vs. HYATT HOTELS A | MagnaChip Semiconductor vs. ECHO INVESTMENT ZY | MagnaChip Semiconductor vs. Sunstone Hotel Investors |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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