Correlation Between Magnachip Semiconductor and HomeToGo
Can any of the company-specific risk be diversified away by investing in both Magnachip Semiconductor and HomeToGo 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 HomeToGo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnachip Semiconductor and HomeToGo SE, you can compare the effects of market volatilities on Magnachip Semiconductor and HomeToGo 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 HomeToGo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnachip Semiconductor and HomeToGo.
Diversification Opportunities for Magnachip Semiconductor and HomeToGo
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magnachip and HomeToGo is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Magnachip Semiconductor and HomeToGo SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeToGo SE 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 HomeToGo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomeToGo SE has no effect on the direction of Magnachip Semiconductor i.e., Magnachip Semiconductor and HomeToGo go up and down completely randomly.
Pair Corralation between Magnachip Semiconductor and HomeToGo
Assuming the 90 days horizon Magnachip Semiconductor is expected to under-perform the HomeToGo. In addition to that, Magnachip Semiconductor is 1.51 times more volatile than HomeToGo SE. It trades about -0.13 of its total potential returns per unit of risk. HomeToGo SE is currently generating about -0.13 per unit of volatility. If you would invest 230.00 in HomeToGo SE on August 29, 2024 and sell it today you would lose (20.00) from holding HomeToGo SE or give up 8.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnachip Semiconductor vs. HomeToGo SE
Performance |
| Timeline |
| Magnachip Semiconductor |
| HomeToGo SE |
Magnachip Semiconductor and HomeToGo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnachip Semiconductor and HomeToGo
The main advantage of trading using opposite Magnachip Semiconductor and HomeToGo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnachip Semiconductor position performs unexpectedly, HomeToGo 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 HomeToGo will offset losses from the drop in HomeToGo's long position.| Magnachip Semiconductor vs. New Residential Investment | Magnachip Semiconductor vs. CDL INVESTMENT | Magnachip Semiconductor vs. Jacquet Metal Service | Magnachip Semiconductor vs. DIVERSIFIED ROYALTY |
| HomeToGo vs. Ryanair Holdings plc | HomeToGo vs. SYSTEMAIR AB | HomeToGo vs. Harmony Gold Mining | HomeToGo vs. Westinghouse Air Brake |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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