Correlation Between Target and MagnaChip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Target 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 Target and MagnaChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Target and MagnaChip Semiconductor Corp, you can compare the effects of market volatilities on Target 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 Target with a short position of MagnaChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Target and MagnaChip Semiconductor.
Diversification Opportunities for Target and MagnaChip Semiconductor
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Target and MagnaChip is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Target and MagnaChip Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MagnaChip Semiconductor and Target 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 Target 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 Target i.e., Target and MagnaChip Semiconductor go up and down completely randomly.
Pair Corralation between Target and MagnaChip Semiconductor
Assuming the 90 days horizon Target is expected to under-perform the MagnaChip Semiconductor. In addition to that, Target is 1.26 times more volatile than MagnaChip Semiconductor Corp. It trades about -0.05 of its total potential returns per unit of risk. MagnaChip Semiconductor Corp is currently generating about -0.01 per unit of volatility. If you would invest 408.00 in MagnaChip Semiconductor Corp on September 1, 2024 and sell it today you would lose (10.00) from holding MagnaChip Semiconductor Corp or give up 2.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Target vs. MagnaChip Semiconductor Corp
Performance |
| Timeline |
| Target |
| MagnaChip Semiconductor |
Target and MagnaChip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Target and MagnaChip Semiconductor
The main advantage of trading using opposite Target and MagnaChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Target 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.| Target vs. TOREX SEMICONDUCTOR LTD | Target vs. MagnaChip Semiconductor Corp | Target vs. Magnachip Semiconductor | Target vs. DELTA AIR LINES |
| MagnaChip Semiconductor vs. Cardinal Health | MagnaChip Semiconductor vs. SMA Solar Technology | MagnaChip Semiconductor vs. Ramsay Health Care | MagnaChip Semiconductor vs. AECOM TECHNOLOGY |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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