Correlation Between Magnachip Semiconductor and Ares Management
Can any of the company-specific risk be diversified away by investing in both Magnachip Semiconductor and Ares Management 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 Ares Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnachip Semiconductor and Ares Management Corp, you can compare the effects of market volatilities on Magnachip Semiconductor and Ares Management 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 Ares Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnachip Semiconductor and Ares Management.
Diversification Opportunities for Magnachip Semiconductor and Ares Management
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magnachip and Ares is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Magnachip Semiconductor and Ares Management Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ares Management Corp 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 Ares Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ares Management Corp has no effect on the direction of Magnachip Semiconductor i.e., Magnachip Semiconductor and Ares Management go up and down completely randomly.
Pair Corralation between Magnachip Semiconductor and Ares Management
Assuming the 90 days horizon Magnachip Semiconductor is expected to under-perform the Ares Management. In addition to that, Magnachip Semiconductor is 1.37 times more volatile than Ares Management Corp. It trades about -0.02 of its total potential returns per unit of risk. Ares Management Corp is currently generating about 0.12 per unit of volatility. If you would invest 12,510 in Ares Management Corp on August 31, 2024 and sell it today you would earn a total of 4,124 from holding Ares Management Corp or generate 32.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.23% |
| Values | Daily Returns |
Magnachip Semiconductor vs. Ares Management Corp
Performance |
| Timeline |
| Magnachip Semiconductor |
| Ares Management Corp |
Magnachip Semiconductor and Ares Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnachip Semiconductor and Ares Management
The main advantage of trading using opposite Magnachip Semiconductor and Ares Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnachip Semiconductor position performs unexpectedly, Ares Management 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 Ares Management will offset losses from the drop in Ares Management's long position.| Magnachip Semiconductor vs. NVIDIA | Magnachip Semiconductor vs. Taiwan Semiconductor Manufacturing | Magnachip Semiconductor vs. Intel |
| Ares Management vs. Ameriprise Financial | Ares Management vs. Superior Plus Corp | Ares Management vs. NMI Holdings | Ares Management vs. Origin Agritech |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |