Correlation Between MagnaChip Semiconductor and Amkor Technology
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and Amkor Technology 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 Amkor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MagnaChip Semiconductor and Amkor Technology, you can compare the effects of market volatilities on MagnaChip Semiconductor and Amkor Technology 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 Amkor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and Amkor Technology.
Diversification Opportunities for MagnaChip Semiconductor and Amkor Technology
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MagnaChip and Amkor is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor and Amkor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amkor Technology 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 Amkor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amkor Technology has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and Amkor Technology go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and Amkor Technology
Allowing for the 90-day total investment horizon MagnaChip Semiconductor is expected to under-perform the Amkor Technology. But the stock apears to be less risky and, when comparing its historical volatility, MagnaChip Semiconductor is 1.36 times less risky than Amkor Technology. The stock trades about -0.08 of its potential returns per unit of risk. The Amkor Technology is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 3,079 in Amkor Technology on August 27, 2024 and sell it today you would lose (425.00) from holding Amkor Technology or give up 13.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MagnaChip Semiconductor vs. Amkor Technology
Performance |
| Timeline |
| MagnaChip Semiconductor |
| Amkor Technology |
MagnaChip Semiconductor and Amkor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and Amkor Technology
The main advantage of trading using opposite MagnaChip Semiconductor and Amkor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, Amkor Technology 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 Amkor Technology will offset losses from the drop in Amkor Technology's long position.| MagnaChip Semiconductor vs. CEVA Inc | MagnaChip Semiconductor vs. MACOM Technology Solutions | MagnaChip Semiconductor vs. FormFactor | MagnaChip Semiconductor vs. MaxLinear |
| Amkor Technology vs. Power Integrations | Amkor Technology vs. Diodes Incorporated | Amkor Technology vs. MACOM Technology Solutions | Amkor Technology vs. Cirrus Logic |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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