Correlation Between Magnachip Semiconductor and J+J SNACK
Can any of the company-specific risk be diversified away by investing in both Magnachip Semiconductor and J+J SNACK 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 J+J SNACK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnachip Semiconductor and JJ SNACK FOODS, you can compare the effects of market volatilities on Magnachip Semiconductor and J+J SNACK 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 J+J SNACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnachip Semiconductor and J+J SNACK.
Diversification Opportunities for Magnachip Semiconductor and J+J SNACK
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magnachip and J+J is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Magnachip Semiconductor and JJ SNACK FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJ SNACK FOODS 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 J+J SNACK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JJ SNACK FOODS has no effect on the direction of Magnachip Semiconductor i.e., Magnachip Semiconductor and J+J SNACK go up and down completely randomly.
Pair Corralation between Magnachip Semiconductor and J+J SNACK
Assuming the 90 days horizon Magnachip Semiconductor is expected to under-perform the J+J SNACK. In addition to that, Magnachip Semiconductor is 2.01 times more volatile than JJ SNACK FOODS. It trades about -0.05 of its total potential returns per unit of risk. JJ SNACK FOODS is currently generating about 0.03 per unit of volatility. If you would invest 13,904 in JJ SNACK FOODS on September 12, 2024 and sell it today you would earn a total of 2,296 from holding JJ SNACK FOODS or generate 16.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnachip Semiconductor vs. JJ SNACK FOODS
Performance |
| Timeline |
| Magnachip Semiconductor |
| JJ SNACK FOODS |
Magnachip Semiconductor and J+J SNACK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnachip Semiconductor and J+J SNACK
The main advantage of trading using opposite Magnachip Semiconductor and J+J SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnachip Semiconductor position performs unexpectedly, J+J SNACK 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 J+J SNACK will offset losses from the drop in J+J SNACK's long position.| Magnachip Semiconductor vs. Check Point Software | Magnachip Semiconductor vs. Wayside Technology Group | Magnachip Semiconductor vs. Computer And Technologies | Magnachip Semiconductor vs. DXC Technology Co |
| J+J SNACK vs. Hormel Foods | J+J SNACK vs. Superior Plus Corp | J+J SNACK vs. SIVERS SEMICONDUCTORS AB | J+J SNACK vs. NorAm Drilling AS |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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