Correlation Between Enphase Energy and MagnaChip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Enphase Energy 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 Enphase Energy and MagnaChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enphase Energy and MagnaChip Semiconductor, you can compare the effects of market volatilities on Enphase Energy 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 Enphase Energy with a short position of MagnaChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enphase Energy and MagnaChip Semiconductor.
Diversification Opportunities for Enphase Energy and MagnaChip Semiconductor
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Enphase and MagnaChip is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Enphase Energy and MagnaChip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MagnaChip Semiconductor and Enphase Energy 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 Enphase Energy 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 Enphase Energy i.e., Enphase Energy and MagnaChip Semiconductor go up and down completely randomly.
Pair Corralation between Enphase Energy and MagnaChip Semiconductor
Given the investment horizon of 90 days Enphase Energy is expected to under-perform the MagnaChip Semiconductor. In addition to that, Enphase Energy is 1.51 times more volatile than MagnaChip Semiconductor. It trades about -0.04 of its total potential returns per unit of risk. MagnaChip Semiconductor is currently generating about -0.02 per unit of volatility. If you would invest 556.00 in MagnaChip Semiconductor on November 21, 2024 and sell it today you would lose (105.00) from holding MagnaChip Semiconductor or give up 18.88% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Enphase Energy vs. MagnaChip Semiconductor
Performance |
Timeline |
Enphase Energy |
MagnaChip Semiconductor |
Enphase Energy and MagnaChip Semiconductor Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Enphase Energy and MagnaChip Semiconductor
The main advantage of trading using opposite Enphase Energy and MagnaChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enphase Energy 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.Enphase Energy vs. First Solar | ||
Enphase Energy vs. Sunrun Inc | ||
Enphase Energy vs. Canadian Solar | ||
Enphase Energy vs. SolarEdge Technologies |
MagnaChip Semiconductor vs. CEVA Inc | ||
MagnaChip Semiconductor vs. MACOM Technology Solutions | ||
MagnaChip Semiconductor vs. FormFactor | ||
MagnaChip Semiconductor vs. MaxLinear |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |