Correlation Between MagnaChip Semiconductor and Axcelis Technologies
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and Axcelis Technologies 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 MagnaChip Semiconductor and Axcelis Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MagnaChip Semiconductor and Axcelis Technologies, you can compare the effects of market volatilities on MagnaChip Semiconductor and Axcelis Technologies 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 MagnaChip Semiconductor with a short position of Axcelis Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and Axcelis Technologies.
Diversification Opportunities for MagnaChip Semiconductor and Axcelis Technologies
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MagnaChip and Axcelis is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor and Axcelis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axcelis Technologies and MagnaChip Semiconductor 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 MagnaChip Semiconductor are associated (or correlated) with Axcelis Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axcelis Technologies has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and Axcelis Technologies go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and Axcelis Technologies
Allowing for the 90-day total investment horizon MagnaChip Semiconductor is expected to generate 1.59 times more return on investment than Axcelis Technologies. However, MagnaChip Semiconductor is 1.59 times more volatile than Axcelis Technologies. It trades about -0.04 of its potential returns per unit of risk. Axcelis Technologies is currently generating about -0.09 per unit of risk. If you would invest 415.00 in MagnaChip Semiconductor on October 12, 2024 and sell it today you would lose (12.00) from holding MagnaChip Semiconductor or give up 2.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MagnaChip Semiconductor vs. Axcelis Technologies
Performance |
| Timeline |
| MagnaChip Semiconductor |
| Axcelis Technologies |
MagnaChip Semiconductor and Axcelis Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and Axcelis Technologies
The main advantage of trading using opposite MagnaChip Semiconductor and Axcelis Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, Axcelis Technologies 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 Axcelis Technologies will offset losses from the drop in Axcelis Technologies' long position.| MagnaChip Semiconductor vs. CEVA Inc | MagnaChip Semiconductor vs. MACOM Technology Solutions | MagnaChip Semiconductor vs. FormFactor | MagnaChip Semiconductor vs. MaxLinear |
| Axcelis Technologies vs. inTest | Axcelis Technologies vs. Lam Research Corp | Axcelis Technologies vs. Photronics | Axcelis Technologies vs. indie Semiconductor |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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