Correlation Between Magnachip Semiconductor and WHIRLPOOL
Can any of the company-specific risk be diversified away by investing in both Magnachip Semiconductor and WHIRLPOOL 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 WHIRLPOOL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnachip Semiconductor and WHIRLPOOL, you can compare the effects of market volatilities on Magnachip Semiconductor and WHIRLPOOL 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 WHIRLPOOL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnachip Semiconductor and WHIRLPOOL.
Diversification Opportunities for Magnachip Semiconductor and WHIRLPOOL
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Magnachip and WHIRLPOOL is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Magnachip Semiconductor and WHIRLPOOL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WHIRLPOOL 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 WHIRLPOOL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WHIRLPOOL has no effect on the direction of Magnachip Semiconductor i.e., Magnachip Semiconductor and WHIRLPOOL go up and down completely randomly.
Pair Corralation between Magnachip Semiconductor and WHIRLPOOL
Assuming the 90 days horizon Magnachip Semiconductor is expected to generate 1.41 times more return on investment than WHIRLPOOL. However, Magnachip Semiconductor is 1.41 times more volatile than WHIRLPOOL. It trades about 0.28 of its potential returns per unit of risk. WHIRLPOOL is currently generating about 0.25 per unit of risk. If you would invest 330.00 in Magnachip Semiconductor on September 4, 2024 and sell it today you would earn a total of 56.00 from holding Magnachip Semiconductor or generate 16.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Magnachip Semiconductor vs. WHIRLPOOL
Performance |
| Timeline |
| Magnachip Semiconductor |
| WHIRLPOOL |
Magnachip Semiconductor and WHIRLPOOL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnachip Semiconductor and WHIRLPOOL
The main advantage of trading using opposite Magnachip Semiconductor and WHIRLPOOL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnachip Semiconductor position performs unexpectedly, WHIRLPOOL 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 WHIRLPOOL will offset losses from the drop in WHIRLPOOL's long position.| Magnachip Semiconductor vs. SLR Investment Corp | Magnachip Semiconductor vs. New Residential Investment | Magnachip Semiconductor vs. COMMERCIAL VEHICLE | Magnachip Semiconductor vs. Apollo Investment Corp |
| WHIRLPOOL vs. KAUFMAN ET BROAD | WHIRLPOOL vs. Gold Road Resources | WHIRLPOOL vs. KENNAMETAL INC | WHIRLPOOL vs. GALENA MINING LTD |
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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