Correlation Between Magnachip Semiconductor and CN MODERN
Can any of the company-specific risk be diversified away by investing in both Magnachip Semiconductor and CN MODERN 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 CN MODERN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnachip Semiconductor and CN MODERN DAIRY, you can compare the effects of market volatilities on Magnachip Semiconductor and CN MODERN 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 CN MODERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnachip Semiconductor and CN MODERN.
Diversification Opportunities for Magnachip Semiconductor and CN MODERN
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Magnachip and 07M is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Magnachip Semiconductor and CN MODERN DAIRY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN MODERN DAIRY 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 CN MODERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN MODERN DAIRY has no effect on the direction of Magnachip Semiconductor i.e., Magnachip Semiconductor and CN MODERN go up and down completely randomly.
Pair Corralation between Magnachip Semiconductor and CN MODERN
Assuming the 90 days horizon Magnachip Semiconductor is expected to under-perform the CN MODERN. In addition to that, Magnachip Semiconductor is 1.05 times more volatile than CN MODERN DAIRY. It trades about -0.06 of its total potential returns per unit of risk. CN MODERN DAIRY is currently generating about 0.04 per unit of volatility. If you would invest 7.97 in CN MODERN DAIRY on September 2, 2024 and sell it today you would earn a total of 1.28 from holding CN MODERN DAIRY or generate 16.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnachip Semiconductor vs. CN MODERN DAIRY
Performance |
| Timeline |
| Magnachip Semiconductor |
| CN MODERN DAIRY |
Magnachip Semiconductor and CN MODERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnachip Semiconductor and CN MODERN
The main advantage of trading using opposite Magnachip Semiconductor and CN MODERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnachip Semiconductor position performs unexpectedly, CN MODERN 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 CN MODERN will offset losses from the drop in CN MODERN's long position.| Magnachip Semiconductor vs. Beyond Meat | Magnachip Semiconductor vs. Titan Machinery | Magnachip Semiconductor vs. Sterling Construction | Magnachip Semiconductor vs. AUSNUTRIA DAIRY |
| CN MODERN vs. SIVERS SEMICONDUCTORS AB | CN MODERN vs. Darden Restaurants | CN MODERN vs. Reliance Steel Aluminum | CN MODERN vs. Q2M Managementberatung AG |
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.
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