Correlation Between MagnaChip Semiconductor and Onto Innovation
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and Onto Innovation 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 Onto Innovation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MagnaChip Semiconductor and Onto Innovation, you can compare the effects of market volatilities on MagnaChip Semiconductor and Onto Innovation 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 Onto Innovation. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and Onto Innovation.
Diversification Opportunities for MagnaChip Semiconductor and Onto Innovation
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MagnaChip and Onto is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor and Onto Innovation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onto Innovation 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 Onto Innovation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onto Innovation has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and Onto Innovation go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and Onto Innovation
Allowing for the 90-day total investment horizon MagnaChip Semiconductor is expected to generate 1.34 times more return on investment than Onto Innovation. However, MagnaChip Semiconductor is 1.34 times more volatile than Onto Innovation. It trades about -0.04 of its potential returns per unit of risk. Onto Innovation is currently generating about -0.36 per unit of risk. If you would invest 448.00 in MagnaChip Semiconductor on August 31, 2024 and sell it today you would lose (23.00) from holding MagnaChip Semiconductor or give up 5.13% 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. Onto Innovation
Performance |
| Timeline |
| MagnaChip Semiconductor |
| Onto Innovation |
MagnaChip Semiconductor and Onto Innovation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and Onto Innovation
The main advantage of trading using opposite MagnaChip Semiconductor and Onto Innovation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, Onto Innovation 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 Onto Innovation will offset losses from the drop in Onto Innovation's long position.| MagnaChip Semiconductor vs. MACOM Technology Solutions | MagnaChip Semiconductor vs. FormFactor | MagnaChip Semiconductor vs. MaxLinear | MagnaChip Semiconductor vs. nLIGHT Inc |
| Onto Innovation vs. Camtek | Onto Innovation vs. Amtech Systems | Onto Innovation vs. Veeco Instruments | Onto Innovation vs. Ichor Holdings |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |