Correlation Between Magnachip Semiconductor and COREBRIDGE FINANCIAL
Can any of the company-specific risk be diversified away by investing in both Magnachip Semiconductor and COREBRIDGE FINANCIAL 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 COREBRIDGE FINANCIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnachip Semiconductor and COREBRIDGE FINANCIAL INC, you can compare the effects of market volatilities on Magnachip Semiconductor and COREBRIDGE FINANCIAL 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 COREBRIDGE FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnachip Semiconductor and COREBRIDGE FINANCIAL.
Diversification Opportunities for Magnachip Semiconductor and COREBRIDGE FINANCIAL
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Magnachip and COREBRIDGE is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Magnachip Semiconductor and COREBRIDGE FINANCIAL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COREBRIDGE FINANCIAL INC 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 COREBRIDGE FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COREBRIDGE FINANCIAL INC has no effect on the direction of Magnachip Semiconductor i.e., Magnachip Semiconductor and COREBRIDGE FINANCIAL go up and down completely randomly.
Pair Corralation between Magnachip Semiconductor and COREBRIDGE FINANCIAL
Assuming the 90 days horizon Magnachip Semiconductor is expected to generate 2.08 times more return on investment than COREBRIDGE FINANCIAL. However, Magnachip Semiconductor is 2.08 times more volatile than COREBRIDGE FINANCIAL INC. It trades about 0.13 of its potential returns per unit of risk. COREBRIDGE FINANCIAL INC is currently generating about 0.08 per unit of risk. If you would invest 352.00 in Magnachip Semiconductor on November 7, 2024 and sell it today you would earn a total of 88.00 from holding Magnachip Semiconductor or generate 25.0% 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. COREBRIDGE FINANCIAL INC
Performance |
| Timeline |
| Magnachip Semiconductor |
| COREBRIDGE FINANCIAL INC |
Magnachip Semiconductor and COREBRIDGE FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnachip Semiconductor and COREBRIDGE FINANCIAL
The main advantage of trading using opposite Magnachip Semiconductor and COREBRIDGE FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnachip Semiconductor position performs unexpectedly, COREBRIDGE FINANCIAL 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 COREBRIDGE FINANCIAL will offset losses from the drop in COREBRIDGE FINANCIAL's long position.| Magnachip Semiconductor vs. NTT DATA | Magnachip Semiconductor vs. US Physical Therapy | Magnachip Semiconductor vs. DATADOT TECHNOLOGY | Magnachip Semiconductor vs. RCI Hospitality Holdings |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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