Correlation Between MagnaChip Semiconductor and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and Summit Hotel 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 Summit Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MagnaChip Semiconductor and Summit Hotel Properties, you can compare the effects of market volatilities on MagnaChip Semiconductor and Summit Hotel 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 Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and Summit Hotel.
Diversification Opportunities for MagnaChip Semiconductor and Summit Hotel
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between MagnaChip and Summit is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor and Summit Hotel Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Hotel Properties 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 Summit Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Hotel Properties has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and Summit Hotel go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and Summit Hotel
Allowing for the 90-day total investment horizon MagnaChip Semiconductor is expected to generate 1.84 times more return on investment than Summit Hotel. However, MagnaChip Semiconductor is 1.84 times more volatile than Summit Hotel Properties. It trades about -0.07 of its potential returns per unit of risk. Summit Hotel Properties is currently generating about -0.15 per unit of risk. If you would invest 420.00 in MagnaChip Semiconductor on October 26, 2024 and sell it today you would lose (13.00) from holding MagnaChip Semiconductor or give up 3.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MagnaChip Semiconductor vs. Summit Hotel Properties
Performance |
| Timeline |
| MagnaChip Semiconductor |
| Summit Hotel Properties |
MagnaChip Semiconductor and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and Summit Hotel
The main advantage of trading using opposite MagnaChip Semiconductor and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, Summit Hotel 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 Summit Hotel will offset losses from the drop in Summit Hotel's long position.| MagnaChip Semiconductor vs. CEVA Inc | MagnaChip Semiconductor vs. MACOM Technology Solutions | MagnaChip Semiconductor vs. FormFactor | MagnaChip Semiconductor vs. MaxLinear |
| Summit Hotel vs. Diamondrock Hospitality | Summit Hotel vs. RLJ Lodging Trust | Summit Hotel vs. Pebblebrook Hotel Trust | Summit Hotel vs. Sunstone Hotel Investors |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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