Correlation Between MSCI WORLD and MagnaChip Semiconductor
Can any of the company-specific risk be diversified away by investing in both MSCI WORLD 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 MSCI WORLD and MagnaChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MSCI WORLD CLIMATE and MagnaChip Semiconductor Corp, you can compare the effects of market volatilities on MSCI WORLD 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 MSCI WORLD with a short position of MagnaChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of MSCI WORLD and MagnaChip Semiconductor.
Diversification Opportunities for MSCI WORLD and MagnaChip Semiconductor
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MSCI and MagnaChip is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding MSCI WORLD CLIMATE and MagnaChip Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MagnaChip Semiconductor and MSCI WORLD 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 MSCI WORLD CLIMATE 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 MSCI WORLD i.e., MSCI WORLD and MagnaChip Semiconductor go up and down completely randomly.
Pair Corralation between MSCI WORLD and MagnaChip Semiconductor
Assuming the 90 days trading horizon MSCI WORLD CLIMATE is expected to generate 1.17 times more return on investment than MagnaChip Semiconductor. However, MSCI WORLD is 1.17 times more volatile than MagnaChip Semiconductor Corp. It trades about 0.11 of its potential returns per unit of risk. MagnaChip Semiconductor Corp is currently generating about -0.04 per unit of risk. If you would invest 1,880 in MSCI WORLD CLIMATE on September 5, 2024 and sell it today you would earn a total of 5,770 from holding MSCI WORLD CLIMATE or generate 306.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
MSCI WORLD CLIMATE vs. MagnaChip Semiconductor Corp
Performance |
| Timeline |
| MSCI WORLD CLIMATE |
| MagnaChip Semiconductor |
MSCI WORLD and MagnaChip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MSCI WORLD and MagnaChip Semiconductor
The main advantage of trading using opposite MSCI WORLD and MagnaChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MSCI WORLD 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.| MSCI WORLD vs. MagnaChip Semiconductor Corp | MSCI WORLD vs. FANDIFI TECHNOLOGY P | MSCI WORLD vs. Microchip Technology Incorporated | MSCI WORLD vs. Magnachip Semiconductor |
| MagnaChip Semiconductor vs. Apple Inc | MagnaChip Semiconductor vs. Apple Inc | MagnaChip Semiconductor vs. Apple Inc | MagnaChip Semiconductor vs. Apple Inc |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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