Correlation Between SAG Holdings and MagnaChip Semiconductor
Can any of the company-specific risk be diversified away by investing in both SAG Holdings 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 SAG Holdings and MagnaChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SAG Holdings Limited and MagnaChip Semiconductor, you can compare the effects of market volatilities on SAG Holdings 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 SAG Holdings with a short position of MagnaChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAG Holdings and MagnaChip Semiconductor.
Diversification Opportunities for SAG Holdings and MagnaChip Semiconductor
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between SAG and MagnaChip is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding SAG Holdings Limited and MagnaChip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MagnaChip Semiconductor and SAG Holdings 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 SAG Holdings Limited 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 SAG Holdings i.e., SAG Holdings and MagnaChip Semiconductor go up and down completely randomly.
Pair Corralation between SAG Holdings and MagnaChip Semiconductor
Considering the 90-day investment horizon SAG Holdings Limited is expected to under-perform the MagnaChip Semiconductor. In addition to that, SAG Holdings is 2.84 times more volatile than MagnaChip Semiconductor. It trades about -0.35 of its total potential returns per unit of risk. MagnaChip Semiconductor is currently generating about -0.02 per unit of volatility. If you would invest 489.00 in MagnaChip Semiconductor on September 2, 2024 and sell it today you would lose (57.00) from holding MagnaChip Semiconductor or give up 11.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 22.22% |
| Values | Daily Returns |
SAG Holdings Limited vs. MagnaChip Semiconductor
Performance |
| Timeline |
| SAG Holdings Limited |
| MagnaChip Semiconductor |
SAG Holdings and MagnaChip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAG Holdings and MagnaChip Semiconductor
The main advantage of trading using opposite SAG Holdings and MagnaChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAG Holdings 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.| SAG Holdings vs. noco noco Warrant | SAG Holdings vs. Ingram Micro Holding | SAG Holdings vs. Hewlett Packard Enterprise | SAG Holdings vs. Global Partners LP |
| MagnaChip Semiconductor vs. NXP Semiconductors NV | MagnaChip Semiconductor vs. GSI Technology | MagnaChip Semiconductor vs. MaxLinear | MagnaChip Semiconductor 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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