Correlation Between Magnachip Semiconductor and WINMARK
Can any of the company-specific risk be diversified away by investing in both Magnachip Semiconductor and WINMARK 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 WINMARK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnachip Semiconductor and WINMARK, you can compare the effects of market volatilities on Magnachip Semiconductor and WINMARK 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 WINMARK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnachip Semiconductor and WINMARK.
Diversification Opportunities for Magnachip Semiconductor and WINMARK
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Magnachip and WINMARK is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Magnachip Semiconductor and WINMARK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WINMARK 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 WINMARK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WINMARK has no effect on the direction of Magnachip Semiconductor i.e., Magnachip Semiconductor and WINMARK go up and down completely randomly.
Pair Corralation between Magnachip Semiconductor and WINMARK
Assuming the 90 days horizon Magnachip Semiconductor is expected to generate 1.27 times more return on investment than WINMARK. However, Magnachip Semiconductor is 1.27 times more volatile than WINMARK. It trades about 0.26 of its potential returns per unit of risk. WINMARK is currently generating about 0.28 per unit of risk. If you would invest 332.00 in Magnachip Semiconductor on September 2, 2024 and sell it today you would earn a total of 54.00 from holding Magnachip Semiconductor or generate 16.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnachip Semiconductor vs. WINMARK
Performance |
| Timeline |
| Magnachip Semiconductor |
| WINMARK |
Magnachip Semiconductor and WINMARK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnachip Semiconductor and WINMARK
The main advantage of trading using opposite Magnachip Semiconductor and WINMARK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnachip Semiconductor position performs unexpectedly, WINMARK 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 WINMARK will offset losses from the drop in WINMARK's long position.| Magnachip Semiconductor vs. Beyond Meat | Magnachip Semiconductor vs. Titan Machinery | Magnachip Semiconductor vs. Sterling Construction | Magnachip Semiconductor vs. AUSNUTRIA DAIRY |
| WINMARK vs. Magnachip Semiconductor | WINMARK vs. Internet Thailand PCL | WINMARK vs. KRISPY KREME DL 01 | WINMARK vs. Entravision Communications |
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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