Correlation Between Patterson-UTI Energy and Magnachip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Patterson-UTI Energy and Magnachip Semiconductor 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 Patterson-UTI Energy and Magnachip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Patterson UTI Energy and Magnachip Semiconductor, you can compare the effects of market volatilities on Patterson-UTI Energy and Magnachip Semiconductor 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 Patterson-UTI Energy with a short position of Magnachip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Patterson-UTI Energy and Magnachip Semiconductor.
Diversification Opportunities for Patterson-UTI Energy and Magnachip Semiconductor
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Patterson-UTI and Magnachip is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Patterson UTI Energy and Magnachip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnachip Semiconductor and Patterson-UTI Energy 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 Patterson UTI Energy are associated (or correlated) with Magnachip Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnachip Semiconductor has no effect on the direction of Patterson-UTI Energy i.e., Patterson-UTI Energy and Magnachip Semiconductor go up and down completely randomly.
Pair Corralation between Patterson-UTI Energy and Magnachip Semiconductor
Assuming the 90 days horizon Patterson UTI Energy is expected to generate 0.94 times more return on investment than Magnachip Semiconductor. However, Patterson UTI Energy is 1.07 times less risky than Magnachip Semiconductor. It trades about -0.03 of its potential returns per unit of risk. Magnachip Semiconductor is currently generating about -0.03 per unit of risk. If you would invest 916.00 in Patterson UTI Energy on September 3, 2024 and sell it today you would lose (116.00) from holding Patterson UTI Energy or give up 12.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Patterson UTI Energy vs. Magnachip Semiconductor
Performance |
| Timeline |
| Patterson UTI Energy |
| Magnachip Semiconductor |
Patterson-UTI Energy and Magnachip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Patterson-UTI Energy and Magnachip Semiconductor
The main advantage of trading using opposite Patterson-UTI Energy and Magnachip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Patterson-UTI Energy position performs unexpectedly, Magnachip Semiconductor 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 Magnachip Semiconductor will offset losses from the drop in Magnachip Semiconductor's long position.| Patterson-UTI Energy vs. TOREX SEMICONDUCTOR LTD | Patterson-UTI Energy vs. Elmos Semiconductor SE | Patterson-UTI Energy vs. Laureate Education | Patterson-UTI Energy vs. Magnachip Semiconductor |
| Magnachip Semiconductor vs. Virtus Investment Partners | Magnachip Semiconductor vs. PennantPark Investment | Magnachip Semiconductor vs. MGIC INVESTMENT | Magnachip Semiconductor vs. HK Electric Investments |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |