Correlation Between MagnaChip Semiconductor and HNI Corp
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and HNI Corp 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 HNI Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MagnaChip Semiconductor and HNI Corp, you can compare the effects of market volatilities on MagnaChip Semiconductor and HNI Corp 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 HNI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and HNI Corp.
Diversification Opportunities for MagnaChip Semiconductor and HNI Corp
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MagnaChip and HNI is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor and HNI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNI Corp 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 HNI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNI Corp has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and HNI Corp go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and HNI Corp
Allowing for the 90-day total investment horizon MagnaChip Semiconductor is expected to under-perform the HNI Corp. In addition to that, MagnaChip Semiconductor is 1.51 times more volatile than HNI Corp. It trades about -0.06 of its total potential returns per unit of risk. HNI Corp is currently generating about 0.1 per unit of volatility. If you would invest 3,949 in HNI Corp on September 2, 2024 and sell it today you would earn a total of 1,716 from holding HNI Corp or generate 43.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MagnaChip Semiconductor vs. HNI Corp
Performance |
| Timeline |
| MagnaChip Semiconductor |
| HNI Corp |
MagnaChip Semiconductor and HNI Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and HNI Corp
The main advantage of trading using opposite MagnaChip Semiconductor and HNI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, HNI Corp 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 HNI Corp will offset losses from the drop in HNI Corp's long position.| MagnaChip Semiconductor vs. NXP Semiconductors NV | MagnaChip Semiconductor vs. GSI Technology | MagnaChip Semiconductor vs. MaxLinear | MagnaChip Semiconductor vs. Texas Instruments Incorporated |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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