Correlation Between MagnaChip Semiconductor and SGS SA
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and SGS SA 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 SGS SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MagnaChip Semiconductor and SGS SA, you can compare the effects of market volatilities on MagnaChip Semiconductor and SGS SA 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 SGS SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and SGS SA.
Diversification Opportunities for MagnaChip Semiconductor and SGS SA
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MagnaChip and SGS is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor and SGS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGS SA 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 SGS SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGS SA has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and SGS SA go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and SGS SA
Allowing for the 90-day total investment horizon MagnaChip Semiconductor is expected to generate 1.87 times more return on investment than SGS SA. However, MagnaChip Semiconductor is 1.87 times more volatile than SGS SA. It trades about 0.26 of its potential returns per unit of risk. SGS SA is currently generating about -0.22 per unit of risk. If you would invest 382.00 in MagnaChip Semiconductor on September 4, 2024 and sell it today you would earn a total of 62.00 from holding MagnaChip Semiconductor or generate 16.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MagnaChip Semiconductor vs. SGS SA
Performance |
| Timeline |
| MagnaChip Semiconductor |
| SGS SA |
MagnaChip Semiconductor and SGS SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and SGS SA
The main advantage of trading using opposite MagnaChip Semiconductor and SGS SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, SGS SA 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 SGS SA will offset losses from the drop in SGS SA's long position.| MagnaChip Semiconductor vs. CEVA Inc | MagnaChip Semiconductor vs. MACOM Technology Solutions | MagnaChip Semiconductor vs. FormFactor | MagnaChip Semiconductor vs. MaxLinear |
| SGS SA vs. Valens | SGS SA vs. Perseus Mining Limited | SGS SA vs. Vishay Intertechnology | SGS SA vs. MagnaChip Semiconductor |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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