Correlation Between Magnachip Semiconductor and G III
Can any of the company-specific risk be diversified away by investing in both Magnachip Semiconductor and G III 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 G III into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnachip Semiconductor and G III Apparel Group, you can compare the effects of market volatilities on Magnachip Semiconductor and G III 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 G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnachip Semiconductor and G III.
Diversification Opportunities for Magnachip Semiconductor and G III
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Magnachip and GI4 is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Magnachip Semiconductor and G III Apparel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G III Apparel 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 G III. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G III Apparel has no effect on the direction of Magnachip Semiconductor i.e., Magnachip Semiconductor and G III go up and down completely randomly.
Pair Corralation between Magnachip Semiconductor and G III
Assuming the 90 days horizon Magnachip Semiconductor is expected to generate 1.33 times more return on investment than G III. However, Magnachip Semiconductor is 1.33 times more volatile than G III Apparel Group. It trades about -0.06 of its potential returns per unit of risk. G III Apparel Group is currently generating about -0.21 per unit of risk. If you would invest 396.00 in Magnachip Semiconductor on October 25, 2024 and sell it today you would lose (10.00) from holding Magnachip Semiconductor or give up 2.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnachip Semiconductor vs. G III Apparel Group
Performance |
| Timeline |
| Magnachip Semiconductor |
| G III Apparel |
Magnachip Semiconductor and G III Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnachip Semiconductor and G III
The main advantage of trading using opposite Magnachip Semiconductor and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnachip Semiconductor position performs unexpectedly, G III 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 G III will offset losses from the drop in G III's long position.| Magnachip Semiconductor vs. FIH MOBILE | Magnachip Semiconductor vs. Iridium Communications | Magnachip Semiconductor vs. SINGAPORE AIRLINES | Magnachip Semiconductor vs. SOCKET MOBILE NEW |
| G III vs. Magnachip Semiconductor | G III vs. JSC Halyk bank | G III vs. CDN IMPERIAL BANK | G III vs. Sun Life Financial |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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