Correlation Between Eidesvik Offshore and Magnachip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Eidesvik Offshore 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 Eidesvik Offshore and Magnachip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eidesvik Offshore ASA and Magnachip Semiconductor, you can compare the effects of market volatilities on Eidesvik Offshore 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 Eidesvik Offshore with a short position of Magnachip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eidesvik Offshore and Magnachip Semiconductor.
Diversification Opportunities for Eidesvik Offshore and Magnachip Semiconductor
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Eidesvik and Magnachip is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Eidesvik Offshore ASA and Magnachip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnachip Semiconductor and Eidesvik Offshore 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 Eidesvik Offshore ASA 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 Eidesvik Offshore i.e., Eidesvik Offshore and Magnachip Semiconductor go up and down completely randomly.
Pair Corralation between Eidesvik Offshore and Magnachip Semiconductor
Assuming the 90 days trading horizon Eidesvik Offshore is expected to generate 15.11 times less return on investment than Magnachip Semiconductor. But when comparing it to its historical volatility, Eidesvik Offshore ASA is 1.94 times less risky than Magnachip Semiconductor. It trades about 0.04 of its potential returns per unit of risk. Magnachip Semiconductor is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 330.00 in Magnachip Semiconductor on September 4, 2024 and sell it today you would earn a total of 56.00 from holding Magnachip Semiconductor or generate 16.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Eidesvik Offshore ASA vs. Magnachip Semiconductor
Performance |
| Timeline |
| Eidesvik Offshore ASA |
| Magnachip Semiconductor |
Eidesvik Offshore and Magnachip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eidesvik Offshore and Magnachip Semiconductor
The main advantage of trading using opposite Eidesvik Offshore and Magnachip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eidesvik Offshore 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.| Eidesvik Offshore vs. Halliburton | Eidesvik Offshore vs. Superior Plus Corp | Eidesvik Offshore vs. NMI Holdings | Eidesvik Offshore vs. Origin Agritech |
| Magnachip Semiconductor vs. SLR Investment Corp | Magnachip Semiconductor vs. New Residential Investment | Magnachip Semiconductor vs. COMMERCIAL VEHICLE | Magnachip Semiconductor vs. Apollo Investment Corp |
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.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |