Correlation Between Magnachip Semiconductor and Eidesvik Offshore
Can any of the company-specific risk be diversified away by investing in both Magnachip Semiconductor and Eidesvik Offshore 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 Eidesvik Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnachip Semiconductor and Eidesvik Offshore ASA, you can compare the effects of market volatilities on Magnachip Semiconductor and Eidesvik Offshore 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 Eidesvik Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnachip Semiconductor and Eidesvik Offshore.
Diversification Opportunities for Magnachip Semiconductor and Eidesvik Offshore
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Magnachip and Eidesvik is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Magnachip Semiconductor and Eidesvik Offshore ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eidesvik Offshore 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 Eidesvik Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eidesvik Offshore ASA has no effect on the direction of Magnachip Semiconductor i.e., Magnachip Semiconductor and Eidesvik Offshore go up and down completely randomly.
Pair Corralation between Magnachip Semiconductor and Eidesvik Offshore
Assuming the 90 days horizon Magnachip Semiconductor is expected to generate 1.94 times more return on investment than Eidesvik Offshore. However, Magnachip Semiconductor is 1.94 times more volatile than Eidesvik Offshore ASA. It trades about 0.28 of its potential returns per unit of risk. Eidesvik Offshore ASA is currently generating about 0.04 per unit of risk. If you would invest 330.00 in Magnachip Semiconductor on September 4, 2024 and sell it today you would earn a total of 56.00 from holding Magnachip Semiconductor or generate 16.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Magnachip Semiconductor vs. Eidesvik Offshore ASA
Performance |
| Timeline |
| Magnachip Semiconductor |
| Eidesvik Offshore ASA |
Magnachip Semiconductor and Eidesvik Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnachip Semiconductor and Eidesvik Offshore
The main advantage of trading using opposite Magnachip Semiconductor and Eidesvik Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnachip Semiconductor position performs unexpectedly, Eidesvik Offshore 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 Eidesvik Offshore will offset losses from the drop in Eidesvik Offshore's long position.| Magnachip Semiconductor vs. SLR Investment Corp | Magnachip Semiconductor vs. New Residential Investment | Magnachip Semiconductor vs. COMMERCIAL VEHICLE | Magnachip Semiconductor vs. Apollo Investment Corp |
| Eidesvik Offshore vs. Halliburton | Eidesvik Offshore vs. Superior Plus Corp | Eidesvik Offshore vs. NMI Holdings | Eidesvik Offshore vs. Origin Agritech |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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