Correlation Between MagnaChip Semiconductor and Amexdrug
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and Amexdrug 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 Amexdrug into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MagnaChip Semiconductor and Amexdrug, you can compare the effects of market volatilities on MagnaChip Semiconductor and Amexdrug 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 Amexdrug. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and Amexdrug.
Diversification Opportunities for MagnaChip Semiconductor and Amexdrug
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MagnaChip and Amexdrug is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor and Amexdrug in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amexdrug 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 Amexdrug. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amexdrug has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and Amexdrug go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and Amexdrug
Allowing for the 90-day total investment horizon MagnaChip Semiconductor is expected to under-perform the Amexdrug. In addition to that, MagnaChip Semiconductor is 6.22 times more volatile than Amexdrug. It trades about -0.03 of its total potential returns per unit of risk. Amexdrug is currently generating about -0.09 per unit of volatility. If you would invest 0.21 in Amexdrug on September 3, 2024 and sell it today you would lose (0.01) from holding Amexdrug or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
MagnaChip Semiconductor vs. Amexdrug
Performance |
| Timeline |
| MagnaChip Semiconductor |
| Amexdrug |
MagnaChip Semiconductor and Amexdrug Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and Amexdrug
The main advantage of trading using opposite MagnaChip Semiconductor and Amexdrug positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, Amexdrug 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 Amexdrug will offset losses from the drop in Amexdrug's long position.| MagnaChip Semiconductor vs. CEVA Inc | MagnaChip Semiconductor vs. MACOM Technology Solutions | MagnaChip Semiconductor vs. FormFactor | MagnaChip Semiconductor vs. MaxLinear |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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