Correlation Between Internet Thailand and Magnachip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Internet Thailand 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 Internet Thailand and Magnachip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Internet Thailand PCL and Magnachip Semiconductor, you can compare the effects of market volatilities on Internet Thailand 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 Internet Thailand with a short position of Magnachip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Internet Thailand and Magnachip Semiconductor.
Diversification Opportunities for Internet Thailand and Magnachip Semiconductor
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Internet and Magnachip is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Internet Thailand PCL and Magnachip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnachip Semiconductor and Internet Thailand 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 Internet Thailand PCL 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 Internet Thailand i.e., Internet Thailand and Magnachip Semiconductor go up and down completely randomly.
Pair Corralation between Internet Thailand and Magnachip Semiconductor
Assuming the 90 days trading horizon Internet Thailand PCL is expected to generate 23.73 times more return on investment than Magnachip Semiconductor. However, Internet Thailand is 23.73 times more volatile than Magnachip Semiconductor. It trades about 0.06 of its potential returns per unit of risk. Magnachip Semiconductor is currently generating about -0.06 per unit of risk. If you would invest 9.45 in Internet Thailand PCL on September 4, 2024 and sell it today you would earn a total of 8.55 from holding Internet Thailand PCL or generate 90.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Internet Thailand PCL vs. Magnachip Semiconductor
Performance |
| Timeline |
| Internet Thailand PCL |
| Magnachip Semiconductor |
Internet Thailand and Magnachip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Internet Thailand and Magnachip Semiconductor
The main advantage of trading using opposite Internet Thailand and Magnachip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Internet Thailand 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.| Internet Thailand vs. Marie Brizard Wine | Internet Thailand vs. Harmony Gold Mining | Internet Thailand vs. CapitaLand Investment Limited | Internet Thailand vs. MGIC INVESTMENT |
| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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