Correlation Between Magnachip Semiconductor and Dno ASA
Can any of the company-specific risk be diversified away by investing in both Magnachip Semiconductor and Dno ASA 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 Dno ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnachip Semiconductor and Dno ASA, you can compare the effects of market volatilities on Magnachip Semiconductor and Dno ASA 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 Dno ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnachip Semiconductor and Dno ASA.
Diversification Opportunities for Magnachip Semiconductor and Dno ASA
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Magnachip and Dno is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Magnachip Semiconductor and Dno ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dno ASA 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 Dno ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dno ASA has no effect on the direction of Magnachip Semiconductor i.e., Magnachip Semiconductor and Dno ASA go up and down completely randomly.
Pair Corralation between Magnachip Semiconductor and Dno ASA
Assuming the 90 days horizon Magnachip Semiconductor is expected to under-perform the Dno ASA. In addition to that, Magnachip Semiconductor is 1.92 times more volatile than Dno ASA. It trades about -0.03 of its total potential returns per unit of risk. Dno ASA is currently generating about 0.06 per unit of volatility. If you would invest 1,300 in Dno ASA on August 31, 2024 and sell it today you would earn a total of 32.00 from holding Dno ASA or generate 2.46% 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. Dno ASA
Performance |
| Timeline |
| Magnachip Semiconductor |
| Dno ASA |
Magnachip Semiconductor and Dno ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnachip Semiconductor and Dno ASA
The main advantage of trading using opposite Magnachip Semiconductor and Dno ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnachip Semiconductor position performs unexpectedly, Dno ASA 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 Dno ASA will offset losses from the drop in Dno ASA's long position.| Magnachip Semiconductor vs. NVIDIA | Magnachip Semiconductor vs. Taiwan Semiconductor Manufacturing | Magnachip Semiconductor vs. Advanced Micro Devices | Magnachip Semiconductor vs. Intel |
| Dno ASA vs. Eastman Chemical | Dno ASA vs. Nordic Semiconductor ASA | Dno ASA vs. Magnachip Semiconductor | Dno ASA vs. Tower Semiconductor |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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