Correlation Between Safestore Holdings and Magnachip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Safestore Holdings 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 Safestore Holdings and Magnachip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safestore Holdings plc and Magnachip Semiconductor, you can compare the effects of market volatilities on Safestore Holdings 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 Safestore Holdings with a short position of Magnachip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safestore Holdings and Magnachip Semiconductor.
Diversification Opportunities for Safestore Holdings and Magnachip Semiconductor
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Safestore and Magnachip is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Safestore Holdings plc and Magnachip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnachip Semiconductor and Safestore Holdings 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 Safestore Holdings plc 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 Safestore Holdings i.e., Safestore Holdings and Magnachip Semiconductor go up and down completely randomly.
Pair Corralation between Safestore Holdings and Magnachip Semiconductor
Assuming the 90 days horizon Safestore Holdings plc is expected to under-perform the Magnachip Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Safestore Holdings plc is 1.09 times less risky than Magnachip Semiconductor. The stock trades about -0.12 of its potential returns per unit of risk. The Magnachip Semiconductor is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 400.00 in Magnachip Semiconductor on November 7, 2024 and sell it today you would earn a total of 40.00 from holding Magnachip Semiconductor or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safestore Holdings plc vs. Magnachip Semiconductor
Performance |
| Timeline |
| Safestore Holdings plc |
| Magnachip Semiconductor |
Safestore Holdings and Magnachip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safestore Holdings and Magnachip Semiconductor
The main advantage of trading using opposite Safestore Holdings and Magnachip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safestore Holdings 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.| Safestore Holdings vs. Xinhua Winshare Publishing | Safestore Holdings vs. Laureate Education | Safestore Holdings vs. Odyssean Investment Trust | Safestore Holdings vs. DEVRY EDUCATION GRP |
| Magnachip Semiconductor vs. IMAGIN MEDICAL INC | Magnachip Semiconductor vs. NTG Nordic Transport | Magnachip Semiconductor vs. Compugroup Medical SE | Magnachip Semiconductor vs. China Medical System |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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