Correlation Between Magnachip Semiconductor and Hollywood Bowl
Can any of the company-specific risk be diversified away by investing in both Magnachip Semiconductor and Hollywood Bowl 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 Hollywood Bowl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnachip Semiconductor and Hollywood Bowl Group, you can compare the effects of market volatilities on Magnachip Semiconductor and Hollywood Bowl 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 Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnachip Semiconductor and Hollywood Bowl.
Diversification Opportunities for Magnachip Semiconductor and Hollywood Bowl
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Magnachip and Hollywood is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Magnachip Semiconductor and Hollywood Bowl Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollywood Bowl Group 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 Hollywood Bowl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollywood Bowl Group has no effect on the direction of Magnachip Semiconductor i.e., Magnachip Semiconductor and Hollywood Bowl go up and down completely randomly.
Pair Corralation between Magnachip Semiconductor and Hollywood Bowl
Assuming the 90 days horizon Magnachip Semiconductor is expected to under-perform the Hollywood Bowl. In addition to that, Magnachip Semiconductor is 1.36 times more volatile than Hollywood Bowl Group. It trades about -0.03 of its total potential returns per unit of risk. Hollywood Bowl Group is currently generating about -0.03 per unit of volatility. If you would invest 378.00 in Hollywood Bowl Group on October 12, 2024 and sell it today you would lose (56.00) from holding Hollywood Bowl Group or give up 14.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnachip Semiconductor vs. Hollywood Bowl Group
Performance |
| Timeline |
| Magnachip Semiconductor |
| Hollywood Bowl Group |
Magnachip Semiconductor and Hollywood Bowl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnachip Semiconductor and Hollywood Bowl
The main advantage of trading using opposite Magnachip Semiconductor and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnachip Semiconductor position performs unexpectedly, Hollywood Bowl 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 Hollywood Bowl will offset losses from the drop in Hollywood Bowl's long position.The idea behind Magnachip Semiconductor and Hollywood Bowl Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Hollywood Bowl vs. Tradeweb Markets | Hollywood Bowl vs. Magnachip Semiconductor | Hollywood Bowl vs. Taiwan Semiconductor Manufacturing | Hollywood Bowl vs. MARKET VECTR RETAIL |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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