Correlation Between Magnachip Semiconductor and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both Magnachip Semiconductor and Aegean Airlines 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 Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnachip Semiconductor and Aegean Airlines SA, you can compare the effects of market volatilities on Magnachip Semiconductor and Aegean Airlines 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 Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnachip Semiconductor and Aegean Airlines.
Diversification Opportunities for Magnachip Semiconductor and Aegean Airlines
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Magnachip and Aegean is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Magnachip Semiconductor and Aegean Airlines SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegean Airlines SA 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 Aegean Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegean Airlines SA has no effect on the direction of Magnachip Semiconductor i.e., Magnachip Semiconductor and Aegean Airlines go up and down completely randomly.
Pair Corralation between Magnachip Semiconductor and Aegean Airlines
Assuming the 90 days horizon Magnachip Semiconductor is expected to under-perform the Aegean Airlines. In addition to that, Magnachip Semiconductor is 1.54 times more volatile than Aegean Airlines SA. It trades about 0.0 of its total potential returns per unit of risk. Aegean Airlines SA is currently generating about 0.16 per unit of volatility. If you would invest 950.00 in Aegean Airlines SA on October 30, 2024 and sell it today you would earn a total of 109.00 from holding Aegean Airlines SA or generate 11.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnachip Semiconductor vs. Aegean Airlines SA
Performance |
| Timeline |
| Magnachip Semiconductor |
| Aegean Airlines SA |
Magnachip Semiconductor and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnachip Semiconductor and Aegean Airlines
The main advantage of trading using opposite Magnachip Semiconductor and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnachip Semiconductor position performs unexpectedly, Aegean Airlines 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 Aegean Airlines will offset losses from the drop in Aegean Airlines' long position.| Magnachip Semiconductor vs. KENEDIX OFFICE INV | Magnachip Semiconductor vs. Neinor Homes SA | Magnachip Semiconductor vs. Taylor Morrison Home | Magnachip Semiconductor vs. INTER CARS SA |
| Aegean Airlines vs. BJs Restaurants | Aegean Airlines vs. CEOTRONICS | Aegean Airlines vs. alstria office REIT AG | Aegean Airlines vs. Perdoceo Education |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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