Correlation Between Magnachip Semiconductor and BANK HANDLOWY
Can any of the company-specific risk be diversified away by investing in both Magnachip Semiconductor and BANK HANDLOWY 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 BANK HANDLOWY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnachip Semiconductor and BANK HANDLOWY, you can compare the effects of market volatilities on Magnachip Semiconductor and BANK HANDLOWY 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 BANK HANDLOWY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnachip Semiconductor and BANK HANDLOWY.
Diversification Opportunities for Magnachip Semiconductor and BANK HANDLOWY
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Magnachip and BANK is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Magnachip Semiconductor and BANK HANDLOWY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK HANDLOWY 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 BANK HANDLOWY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK HANDLOWY has no effect on the direction of Magnachip Semiconductor i.e., Magnachip Semiconductor and BANK HANDLOWY go up and down completely randomly.
Pair Corralation between Magnachip Semiconductor and BANK HANDLOWY
Assuming the 90 days horizon Magnachip Semiconductor is expected to under-perform the BANK HANDLOWY. In addition to that, Magnachip Semiconductor is 9.75 times more volatile than BANK HANDLOWY. It trades about -0.16 of its total potential returns per unit of risk. BANK HANDLOWY is currently generating about -0.36 per unit of volatility. If you would invest 2,100 in BANK HANDLOWY on August 28, 2024 and sell it today you would lose (70.00) from holding BANK HANDLOWY or give up 3.33% 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. BANK HANDLOWY
Performance |
| Timeline |
| Magnachip Semiconductor |
| BANK HANDLOWY |
Magnachip Semiconductor and BANK HANDLOWY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnachip Semiconductor and BANK HANDLOWY
The main advantage of trading using opposite Magnachip Semiconductor and BANK HANDLOWY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnachip Semiconductor position performs unexpectedly, BANK HANDLOWY 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 BANK HANDLOWY will offset losses from the drop in BANK HANDLOWY's long position.| Magnachip Semiconductor vs. Sunny Optical Technology | Magnachip Semiconductor vs. PKSHA TECHNOLOGY INC | Magnachip Semiconductor vs. GLG LIFE TECH | Magnachip Semiconductor vs. UNIVERSAL MUSIC GROUP |
| BANK HANDLOWY vs. TIANDE CHEMICAL | BANK HANDLOWY vs. ECHO INVESTMENT ZY | BANK HANDLOWY vs. MGIC INVESTMENT | BANK HANDLOWY vs. Marie Brizard Wine |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |