Correlation Between Magnachip Semiconductor and Maple Leaf
Can any of the company-specific risk be diversified away by investing in both Magnachip Semiconductor and Maple Leaf 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 Maple Leaf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnachip Semiconductor and Maple Leaf Foods, you can compare the effects of market volatilities on Magnachip Semiconductor and Maple Leaf 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 Maple Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnachip Semiconductor and Maple Leaf.
Diversification Opportunities for Magnachip Semiconductor and Maple Leaf
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Magnachip and Maple is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Magnachip Semiconductor and Maple Leaf Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maple Leaf 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 Maple Leaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maple Leaf Foods has no effect on the direction of Magnachip Semiconductor i.e., Magnachip Semiconductor and Maple Leaf go up and down completely randomly.
Pair Corralation between Magnachip Semiconductor and Maple Leaf
Assuming the 90 days horizon Magnachip Semiconductor is expected to under-perform the Maple Leaf. In addition to that, Magnachip Semiconductor is 1.54 times more volatile than Maple Leaf Foods. It trades about -0.06 of its total potential returns per unit of risk. Maple Leaf Foods is currently generating about -0.01 per unit of volatility. If you would invest 1,687 in Maple Leaf Foods on September 12, 2024 and sell it today you would lose (197.00) from holding Maple Leaf Foods or give up 11.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Magnachip Semiconductor vs. Maple Leaf Foods
Performance |
| Timeline |
| Magnachip Semiconductor |
| Maple Leaf Foods |
Magnachip Semiconductor and Maple Leaf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnachip Semiconductor and Maple Leaf
The main advantage of trading using opposite Magnachip Semiconductor and Maple Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnachip Semiconductor position performs unexpectedly, Maple Leaf 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 Maple Leaf will offset losses from the drop in Maple Leaf'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 |
| Maple Leaf vs. TOREX SEMICONDUCTOR LTD | Maple Leaf vs. Marie Brizard Wine | Maple Leaf vs. Magnachip Semiconductor | Maple Leaf vs. ECHO INVESTMENT ZY |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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