Correlation Between KENEDIX OFFICE and Magnachip Semiconductor
Can any of the company-specific risk be diversified away by investing in both KENEDIX OFFICE 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 KENEDIX OFFICE and Magnachip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KENEDIX OFFICE INV and Magnachip Semiconductor, you can compare the effects of market volatilities on KENEDIX OFFICE 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 KENEDIX OFFICE with a short position of Magnachip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of KENEDIX OFFICE and Magnachip Semiconductor.
Diversification Opportunities for KENEDIX OFFICE and Magnachip Semiconductor
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KENEDIX and Magnachip is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding KENEDIX OFFICE INV and Magnachip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnachip Semiconductor and KENEDIX OFFICE 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 KENEDIX OFFICE INV 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 KENEDIX OFFICE i.e., KENEDIX OFFICE and Magnachip Semiconductor go up and down completely randomly.
Pair Corralation between KENEDIX OFFICE and Magnachip Semiconductor
Assuming the 90 days horizon KENEDIX OFFICE INV is expected to generate 0.52 times more return on investment than Magnachip Semiconductor. However, KENEDIX OFFICE INV is 1.92 times less risky than Magnachip Semiconductor. It trades about -0.03 of its potential returns per unit of risk. Magnachip Semiconductor is currently generating about -0.06 per unit of risk. If you would invest 108,000 in KENEDIX OFFICE INV on October 16, 2024 and sell it today you would lose (20,000) from holding KENEDIX OFFICE INV or give up 18.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KENEDIX OFFICE INV vs. Magnachip Semiconductor
Performance |
| Timeline |
| KENEDIX OFFICE INV |
| Magnachip Semiconductor |
KENEDIX OFFICE and Magnachip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KENEDIX OFFICE and Magnachip Semiconductor
The main advantage of trading using opposite KENEDIX OFFICE and Magnachip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KENEDIX OFFICE 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.| KENEDIX OFFICE vs. SENECA FOODS A | KENEDIX OFFICE vs. United Natural Foods | KENEDIX OFFICE vs. Ebro Foods SA | KENEDIX OFFICE vs. GWILLI FOOD |
| Magnachip Semiconductor vs. NURAN WIRELESS INC | Magnachip Semiconductor vs. Brockhaus Capital Management | Magnachip Semiconductor vs. KENEDIX OFFICE INV | Magnachip Semiconductor vs. KOBE STEEL LTD |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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