Correlation Between Gold Fields and MagnaChip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Gold Fields 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 Gold Fields and MagnaChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Fields Ltd and MagnaChip Semiconductor, you can compare the effects of market volatilities on Gold Fields 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 Gold Fields with a short position of MagnaChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and MagnaChip Semiconductor.
Diversification Opportunities for Gold Fields and MagnaChip Semiconductor
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gold and MagnaChip is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and MagnaChip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MagnaChip Semiconductor and Gold Fields 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 Gold Fields Ltd 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 Gold Fields i.e., Gold Fields and MagnaChip Semiconductor go up and down completely randomly.
Pair Corralation between Gold Fields and MagnaChip Semiconductor
Considering the 90-day investment horizon Gold Fields Ltd is expected to under-perform the MagnaChip Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Gold Fields Ltd is 1.33 times less risky than MagnaChip Semiconductor. The stock trades about -0.23 of its potential returns per unit of risk. The MagnaChip Semiconductor is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 464.00 in MagnaChip Semiconductor on August 28, 2024 and sell it today you would lose (65.00) from holding MagnaChip Semiconductor or give up 14.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gold Fields Ltd vs. MagnaChip Semiconductor
Performance |
| Timeline |
| Gold Fields |
| MagnaChip Semiconductor |
Gold Fields and MagnaChip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Fields and MagnaChip Semiconductor
The main advantage of trading using opposite Gold Fields and MagnaChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Fields 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.| Gold Fields vs. Agnico Eagle Mines | Gold Fields vs. Kinross Gold | Gold Fields vs. Harmony Gold Mining | Gold Fields vs. Franco Nevada |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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