Correlation Between MagnaChip Semiconductor and Sonida Senior
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and Sonida Senior 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 Sonida Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MagnaChip Semiconductor and Sonida Senior Living, you can compare the effects of market volatilities on MagnaChip Semiconductor and Sonida Senior 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 Sonida Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and Sonida Senior.
Diversification Opportunities for MagnaChip Semiconductor and Sonida Senior
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MagnaChip and Sonida is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor and Sonida Senior Living in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonida Senior Living 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 Sonida Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonida Senior Living has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and Sonida Senior go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and Sonida Senior
Allowing for the 90-day total investment horizon MagnaChip Semiconductor is expected to under-perform the Sonida Senior. But the stock apears to be less risky and, when comparing its historical volatility, MagnaChip Semiconductor is 1.07 times less risky than Sonida Senior. The stock trades about -0.05 of its potential returns per unit of risk. The Sonida Senior Living is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,621 in Sonida Senior Living on September 12, 2024 and sell it today you would lose (79.00) from holding Sonida Senior Living or give up 3.01% 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. Sonida Senior Living
Performance |
| Timeline |
| MagnaChip Semiconductor |
| Sonida Senior Living |
MagnaChip Semiconductor and Sonida Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and Sonida Senior
The main advantage of trading using opposite MagnaChip Semiconductor and Sonida Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, Sonida Senior 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 Sonida Senior will offset losses from the drop in Sonida Senior's long position.| MagnaChip Semiconductor vs. CEVA Inc | MagnaChip Semiconductor vs. MACOM Technology Solutions | MagnaChip Semiconductor vs. FormFactor | MagnaChip Semiconductor vs. MaxLinear |
| Sonida Senior vs. Select Medical Holdings | Sonida Senior vs. Encompass Health Corp | Sonida Senior vs. Pennant Group | Sonida Senior vs. InnovAge Holding Corp |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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