Correlation Between MagnaChip Semiconductor and GSI Technology
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and GSI 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 GSI 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 GSI Technology, you can compare the effects of market volatilities on MagnaChip Semiconductor and GSI 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 GSI Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and GSI Technology.
Diversification Opportunities for MagnaChip Semiconductor and GSI Technology
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MagnaChip and GSI is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor and GSI Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GSI 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 GSI Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GSI Technology has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and GSI Technology go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and GSI Technology
Allowing for the 90-day total investment horizon MagnaChip Semiconductor is expected to under-perform the GSI Technology. But the stock apears to be less risky and, when comparing its historical volatility, MagnaChip Semiconductor is 1.13 times less risky than GSI Technology. The stock trades about -0.2 of its potential returns per unit of risk. The GSI Technology is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 369.00 in GSI Technology on August 27, 2024 and sell it today you would lose (59.00) from holding GSI Technology or give up 15.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MagnaChip Semiconductor vs. GSI Technology
Performance |
| Timeline |
| MagnaChip Semiconductor |
| GSI Technology |
MagnaChip Semiconductor and GSI Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and GSI Technology
The main advantage of trading using opposite MagnaChip Semiconductor and GSI Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, GSI 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 GSI Technology will offset losses from the drop in GSI Technology's long position.| MagnaChip Semiconductor vs. CEVA Inc | MagnaChip Semiconductor vs. MACOM Technology Solutions | MagnaChip Semiconductor vs. FormFactor | MagnaChip Semiconductor vs. MaxLinear |
| GSI Technology vs. SEALSQ Corp | GSI Technology vs. Nano Labs | GSI Technology vs. SemiLEDS | GSI Technology vs. Wisekey International Holding |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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