Correlation Between Magnachip Semiconductor and USWE SPORTS
Can any of the company-specific risk be diversified away by investing in both Magnachip Semiconductor and USWE SPORTS 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 USWE SPORTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnachip Semiconductor and USWE SPORTS AB, you can compare the effects of market volatilities on Magnachip Semiconductor and USWE SPORTS 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 USWE SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnachip Semiconductor and USWE SPORTS.
Diversification Opportunities for Magnachip Semiconductor and USWE SPORTS
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Magnachip and USWE is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Magnachip Semiconductor and USWE SPORTS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USWE SPORTS AB 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 USWE SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USWE SPORTS AB has no effect on the direction of Magnachip Semiconductor i.e., Magnachip Semiconductor and USWE SPORTS go up and down completely randomly.
Pair Corralation between Magnachip Semiconductor and USWE SPORTS
Assuming the 90 days horizon Magnachip Semiconductor is expected to under-perform the USWE SPORTS. In addition to that, Magnachip Semiconductor is 1.13 times more volatile than USWE SPORTS AB. It trades about 0.0 of its total potential returns per unit of risk. USWE SPORTS AB is currently generating about 0.08 per unit of volatility. If you would invest 73.00 in USWE SPORTS AB on October 16, 2024 and sell it today you would earn a total of 2.00 from holding USWE SPORTS AB or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnachip Semiconductor vs. USWE SPORTS AB
Performance |
| Timeline |
| Magnachip Semiconductor |
| USWE SPORTS AB |
Magnachip Semiconductor and USWE SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnachip Semiconductor and USWE SPORTS
The main advantage of trading using opposite Magnachip Semiconductor and USWE SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnachip Semiconductor position performs unexpectedly, USWE SPORTS 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 USWE SPORTS will offset losses from the drop in USWE SPORTS's long position.| Magnachip Semiconductor vs. NURAN WIRELESS INC | Magnachip Semiconductor vs. Brockhaus Capital Management | Magnachip Semiconductor vs. KENEDIX OFFICE INV | Magnachip Semiconductor vs. KOBE STEEL LTD |
| USWE SPORTS vs. ON SEMICONDUCTOR | USWE SPORTS vs. TOREX SEMICONDUCTOR LTD | USWE SPORTS vs. Magnachip Semiconductor | USWE SPORTS vs. Semiconductor Manufacturing International |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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