Correlation Between Magnachip Semiconductor and Strix Group
Can any of the company-specific risk be diversified away by investing in both Magnachip Semiconductor and Strix Group 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 Strix Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnachip Semiconductor and Strix Group Plc, you can compare the effects of market volatilities on Magnachip Semiconductor and Strix Group 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 Strix Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnachip Semiconductor and Strix Group.
Diversification Opportunities for Magnachip Semiconductor and Strix Group
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Magnachip and Strix is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Magnachip Semiconductor and Strix Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strix Group Plc 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 Strix Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strix Group Plc has no effect on the direction of Magnachip Semiconductor i.e., Magnachip Semiconductor and Strix Group go up and down completely randomly.
Pair Corralation between Magnachip Semiconductor and Strix Group
Assuming the 90 days horizon Magnachip Semiconductor is expected to generate 1.01 times more return on investment than Strix Group. However, Magnachip Semiconductor is 1.01 times more volatile than Strix Group Plc. It trades about 0.01 of its potential returns per unit of risk. Strix Group Plc is currently generating about -0.21 per unit of risk. If you would invest 390.00 in Magnachip Semiconductor on September 3, 2024 and sell it today you would lose (4.00) from holding Magnachip Semiconductor or give up 1.03% 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. Strix Group Plc
Performance |
| Timeline |
| Magnachip Semiconductor |
| Strix Group Plc |
Magnachip Semiconductor and Strix Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnachip Semiconductor and Strix Group
The main advantage of trading using opposite Magnachip Semiconductor and Strix Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnachip Semiconductor position performs unexpectedly, Strix Group 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 Strix Group will offset losses from the drop in Strix Group's long position.| Magnachip Semiconductor vs. Virtus Investment Partners | Magnachip Semiconductor vs. PennantPark Investment | Magnachip Semiconductor vs. MGIC INVESTMENT | Magnachip Semiconductor vs. HK Electric Investments |
| Strix Group vs. Steel Dynamics | Strix Group vs. Datang International Power | Strix Group vs. Automatic Data Processing | Strix Group vs. RELIANCE STEEL AL |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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