Correlation Between Imperial Metals and Magnachip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Imperial Metals 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 Imperial Metals and Magnachip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imperial Metals and Magnachip Semiconductor, you can compare the effects of market volatilities on Imperial Metals 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 Imperial Metals with a short position of Magnachip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imperial Metals and Magnachip Semiconductor.
Diversification Opportunities for Imperial Metals and Magnachip Semiconductor
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Imperial and Magnachip is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Imperial Metals and Magnachip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnachip Semiconductor and Imperial Metals 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 Imperial Metals 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 Imperial Metals i.e., Imperial Metals and Magnachip Semiconductor go up and down completely randomly.
Pair Corralation between Imperial Metals and Magnachip Semiconductor
Assuming the 90 days horizon Imperial Metals is expected to under-perform the Magnachip Semiconductor. In addition to that, Imperial Metals is 1.24 times more volatile than Magnachip Semiconductor. It trades about -0.01 of its total potential returns per unit of risk. Magnachip Semiconductor is currently generating about 0.21 per unit of volatility. If you would invest 370.00 in Magnachip Semiconductor on October 22, 2024 and sell it today you would earn a total of 32.00 from holding Magnachip Semiconductor or generate 8.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imperial Metals vs. Magnachip Semiconductor
Performance |
| Timeline |
| Imperial Metals |
| Magnachip Semiconductor |
Imperial Metals and Magnachip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imperial Metals and Magnachip Semiconductor
The main advantage of trading using opposite Imperial Metals and Magnachip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imperial Metals 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.| Imperial Metals vs. Nippon Steel | Imperial Metals vs. LIFENET INSURANCE CO | Imperial Metals vs. BlueScope Steel Limited | Imperial Metals vs. MOUNT GIBSON IRON |
| Magnachip Semiconductor vs. Zijin Mining Group | Magnachip Semiconductor vs. Monument Mining Limited | Magnachip Semiconductor vs. WillScot Mobile Mini | Magnachip Semiconductor vs. Entravision Communications |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |