Correlation Between Magnachip Semiconductor and TERADATA
Can any of the company-specific risk be diversified away by investing in both Magnachip Semiconductor and TERADATA 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 TERADATA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnachip Semiconductor and TERADATA, you can compare the effects of market volatilities on Magnachip Semiconductor and TERADATA 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 TERADATA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnachip Semiconductor and TERADATA.
Diversification Opportunities for Magnachip Semiconductor and TERADATA
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Magnachip and TERADATA is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Magnachip Semiconductor and TERADATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TERADATA 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 TERADATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TERADATA has no effect on the direction of Magnachip Semiconductor i.e., Magnachip Semiconductor and TERADATA go up and down completely randomly.
Pair Corralation between Magnachip Semiconductor and TERADATA
Assuming the 90 days horizon Magnachip Semiconductor is expected to generate 4.85 times more return on investment than TERADATA. However, Magnachip Semiconductor is 4.85 times more volatile than TERADATA. It trades about 0.0 of its potential returns per unit of risk. TERADATA is currently generating about -0.45 per unit of risk. If you would invest 380.00 in Magnachip Semiconductor on October 16, 2024 and sell it today you would lose (2.00) from holding Magnachip Semiconductor or give up 0.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnachip Semiconductor vs. TERADATA
Performance |
| Timeline |
| Magnachip Semiconductor |
| TERADATA |
Magnachip Semiconductor and TERADATA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnachip Semiconductor and TERADATA
The main advantage of trading using opposite Magnachip Semiconductor and TERADATA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnachip Semiconductor position performs unexpectedly, TERADATA 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 TERADATA will offset losses from the drop in TERADATA's long position.| Magnachip Semiconductor vs. MACOM Technology Solutions | Magnachip Semiconductor vs. Alfa Financial Software | Magnachip Semiconductor vs. The Boston Beer | Magnachip Semiconductor vs. Thai Beverage Public |
| TERADATA vs. Ribbon Communications | TERADATA vs. Charter Communications | TERADATA vs. Shenandoah Telecommunications | TERADATA vs. CHEMICAL INDUSTRIES |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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