Correlation Between KEYCORP and MagnaChip Semiconductor
Can any of the company-specific risk be diversified away by investing in both KEYCORP 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 KEYCORP and MagnaChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KEYCORP and MagnaChip Semiconductor Corp, you can compare the effects of market volatilities on KEYCORP 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 KEYCORP with a short position of MagnaChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of KEYCORP and MagnaChip Semiconductor.
Diversification Opportunities for KEYCORP and MagnaChip Semiconductor
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between KEYCORP and MagnaChip is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding KEYCORP and MagnaChip Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MagnaChip Semiconductor and KEYCORP 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 KEYCORP 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 KEYCORP i.e., KEYCORP and MagnaChip Semiconductor go up and down completely randomly.
Pair Corralation between KEYCORP and MagnaChip Semiconductor
Assuming the 90 days trading horizon KEYCORP is expected to generate 0.73 times more return on investment than MagnaChip Semiconductor. However, KEYCORP is 1.38 times less risky than MagnaChip Semiconductor. It trades about 0.15 of its potential returns per unit of risk. MagnaChip Semiconductor Corp is currently generating about -0.06 per unit of risk. If you would invest 1,211 in KEYCORP on November 3, 2024 and sell it today you would earn a total of 510.00 from holding KEYCORP or generate 42.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KEYCORP vs. MagnaChip Semiconductor Corp
Performance |
| Timeline |
| KEYCORP |
| MagnaChip Semiconductor |
KEYCORP and MagnaChip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KEYCORP and MagnaChip Semiconductor
The main advantage of trading using opposite KEYCORP and MagnaChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KEYCORP 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.| KEYCORP vs. PLANT VEDA FOODS | KEYCORP vs. SENECA FOODS A | KEYCORP vs. CAL MAINE FOODS | KEYCORP vs. Sekisui Chemical Co |
| MagnaChip Semiconductor vs. SIVERS SEMICONDUCTORS AB | MagnaChip Semiconductor vs. NorAm Drilling AS | MagnaChip Semiconductor vs. Volkswagen AG | MagnaChip Semiconductor vs. Darden Restaurants |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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