Correlation Between WINMARK and Magnachip Semiconductor
Can any of the company-specific risk be diversified away by investing in both WINMARK 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 WINMARK and Magnachip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WINMARK and Magnachip Semiconductor, you can compare the effects of market volatilities on WINMARK 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 WINMARK with a short position of Magnachip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of WINMARK and Magnachip Semiconductor.
Diversification Opportunities for WINMARK and Magnachip Semiconductor
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WINMARK and Magnachip is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding WINMARK and Magnachip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnachip Semiconductor and WINMARK 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 WINMARK 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 WINMARK i.e., WINMARK and Magnachip Semiconductor go up and down completely randomly.
Pair Corralation between WINMARK and Magnachip Semiconductor
Assuming the 90 days trading horizon WINMARK is expected to generate 0.72 times more return on investment than Magnachip Semiconductor. However, WINMARK is 1.39 times less risky than Magnachip Semiconductor. It trades about 0.0 of its potential returns per unit of risk. Magnachip Semiconductor is currently generating about -0.06 per unit of risk. If you would invest 40,792 in WINMARK on September 4, 2024 and sell it today you would lose (1,792) from holding WINMARK or give up 4.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WINMARK vs. Magnachip Semiconductor
Performance |
| Timeline |
| WINMARK |
| Magnachip Semiconductor |
WINMARK and Magnachip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WINMARK and Magnachip Semiconductor
The main advantage of trading using opposite WINMARK and Magnachip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WINMARK 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.| WINMARK vs. Alaska Air Group | WINMARK vs. NORWEGIAN AIR SHUT | WINMARK vs. BROADSTNET LEADL 00025 | WINMARK vs. Transportadora de Gas |
| 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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