Correlation Between Magnachip Semiconductor and Coca Cola
Can any of the company-specific risk be diversified away by investing in both Magnachip Semiconductor and Coca Cola 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 Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnachip Semiconductor and The Coca Cola, you can compare the effects of market volatilities on Magnachip Semiconductor and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnachip Semiconductor and Coca Cola.
Diversification Opportunities for Magnachip Semiconductor and Coca Cola
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Magnachip and Coca is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Magnachip Semiconductor and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola 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 Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola has no effect on the direction of Magnachip Semiconductor i.e., Magnachip Semiconductor and Coca Cola go up and down completely randomly.
Pair Corralation between Magnachip Semiconductor and Coca Cola
Assuming the 90 days horizon Magnachip Semiconductor is expected to under-perform the Coca Cola. In addition to that, Magnachip Semiconductor is 2.87 times more volatile than The Coca Cola. It trades about -0.09 of its total potential returns per unit of risk. The Coca Cola is currently generating about 0.05 per unit of volatility. If you would invest 5,307 in The Coca Cola on August 31, 2024 and sell it today you would earn a total of 842.00 from holding The Coca Cola or generate 15.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnachip Semiconductor vs. The Coca Cola
Performance |
| Timeline |
| Magnachip Semiconductor |
| Coca Cola |
Magnachip Semiconductor and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnachip Semiconductor and Coca Cola
The main advantage of trading using opposite Magnachip Semiconductor and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnachip Semiconductor position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.| Magnachip Semiconductor vs. NVIDIA | Magnachip Semiconductor vs. Taiwan Semiconductor Manufacturing | Magnachip Semiconductor vs. Intel |
| Coca Cola vs. Magnachip Semiconductor | Coca Cola vs. GALENA MINING LTD | Coca Cola vs. TOREX SEMICONDUCTOR LTD | Coca Cola vs. NetSol Technologies |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |