Correlation Between MagnaChip Semiconductor and Veeco Instruments
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and Veeco Instruments 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 Veeco Instruments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MagnaChip Semiconductor and Veeco Instruments, you can compare the effects of market volatilities on MagnaChip Semiconductor and Veeco Instruments 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 Veeco Instruments. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and Veeco Instruments.
Diversification Opportunities for MagnaChip Semiconductor and Veeco Instruments
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MagnaChip and Veeco is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor and Veeco Instruments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veeco Instruments 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 Veeco Instruments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veeco Instruments has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and Veeco Instruments go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and Veeco Instruments
Allowing for the 90-day total investment horizon MagnaChip Semiconductor is expected to generate 1.22 times more return on investment than Veeco Instruments. However, MagnaChip Semiconductor is 1.22 times more volatile than Veeco Instruments. It trades about -0.01 of its potential returns per unit of risk. Veeco Instruments is currently generating about -0.09 per unit of risk. If you would invest 454.00 in MagnaChip Semiconductor on September 2, 2024 and sell it today you would lose (22.00) from holding MagnaChip Semiconductor or give up 4.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MagnaChip Semiconductor vs. Veeco Instruments
Performance |
| Timeline |
| MagnaChip Semiconductor |
| Veeco Instruments |
MagnaChip Semiconductor and Veeco Instruments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and Veeco Instruments
The main advantage of trading using opposite MagnaChip Semiconductor and Veeco Instruments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, Veeco Instruments 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 Veeco Instruments will offset losses from the drop in Veeco Instruments' long position.| MagnaChip Semiconductor vs. NXP Semiconductors NV | MagnaChip Semiconductor vs. GSI Technology | MagnaChip Semiconductor vs. MaxLinear | MagnaChip Semiconductor vs. Texas Instruments Incorporated |
| Veeco Instruments vs. NXP Semiconductors NV | Veeco Instruments vs. GSI Technology | Veeco Instruments vs. MaxLinear | Veeco Instruments 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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |