Correlation Between Grand Canyon and Magnachip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Grand Canyon 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 Grand Canyon and Magnachip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Canyon Education and Magnachip Semiconductor, you can compare the effects of market volatilities on Grand Canyon 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 Grand Canyon with a short position of Magnachip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Canyon and Magnachip Semiconductor.
Diversification Opportunities for Grand Canyon and Magnachip Semiconductor
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grand and Magnachip is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and Magnachip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnachip Semiconductor and Grand Canyon 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 Grand Canyon Education 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 Grand Canyon i.e., Grand Canyon and Magnachip Semiconductor go up and down completely randomly.
Pair Corralation between Grand Canyon and Magnachip Semiconductor
Assuming the 90 days trading horizon Grand Canyon is expected to generate 43.59 times less return on investment than Magnachip Semiconductor. But when comparing it to its historical volatility, Grand Canyon Education is 2.07 times less risky than Magnachip Semiconductor. It trades about 0.01 of its potential returns per unit of risk. Magnachip Semiconductor is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 348.00 in Magnachip Semiconductor on September 14, 2024 and sell it today you would earn a total of 40.00 from holding Magnachip Semiconductor or generate 11.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Canyon Education vs. Magnachip Semiconductor
Performance |
| Timeline |
| Grand Canyon Education |
| Magnachip Semiconductor |
Grand Canyon and Magnachip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Canyon and Magnachip Semiconductor
The main advantage of trading using opposite Grand Canyon and Magnachip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Canyon 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.| Grand Canyon vs. Apple Inc | Grand Canyon vs. Apple Inc | Grand Canyon vs. Apple Inc | Grand Canyon vs. Apple Inc |
| Magnachip Semiconductor vs. LION ONE METALS | Magnachip Semiconductor vs. EMBARK EDUCATION LTD | Magnachip Semiconductor vs. Grand Canyon Education | Magnachip Semiconductor vs. Perdoceo Education |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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