Correlation Between MagnaChip Semiconductor and PPHE HOTEL
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and PPHE HOTEL 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 PPHE HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MagnaChip Semiconductor Corp and PPHE HOTEL GROUP, you can compare the effects of market volatilities on MagnaChip Semiconductor and PPHE HOTEL 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 PPHE HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and PPHE HOTEL.
Diversification Opportunities for MagnaChip Semiconductor and PPHE HOTEL
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MagnaChip and PPHE is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor Corp and PPHE HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE HOTEL GROUP 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 Corp are associated (or correlated) with PPHE HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE HOTEL GROUP has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and PPHE HOTEL go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and PPHE HOTEL
Assuming the 90 days trading horizon MagnaChip Semiconductor is expected to generate 1.5 times less return on investment than PPHE HOTEL. In addition to that, MagnaChip Semiconductor is 1.62 times more volatile than PPHE HOTEL GROUP. It trades about 0.14 of its total potential returns per unit of risk. PPHE HOTEL GROUP is currently generating about 0.35 per unit of volatility. If you would invest 1,380 in PPHE HOTEL GROUP on September 20, 2024 and sell it today you would earn a total of 210.00 from holding PPHE HOTEL GROUP or generate 15.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MagnaChip Semiconductor Corp vs. PPHE HOTEL GROUP
Performance |
| Timeline |
| MagnaChip Semiconductor |
| PPHE HOTEL GROUP |
MagnaChip Semiconductor and PPHE HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and PPHE HOTEL
The main advantage of trading using opposite MagnaChip Semiconductor and PPHE HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, PPHE HOTEL 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 PPHE HOTEL will offset losses from the drop in PPHE HOTEL's long position.| MagnaChip Semiconductor vs. JAPAN AIRLINES | MagnaChip Semiconductor vs. National Beverage Corp | MagnaChip Semiconductor vs. HF FOODS GRP | MagnaChip Semiconductor vs. Associated British Foods |
| PPHE HOTEL vs. NORTHEAST UTILITIES | PPHE HOTEL vs. LG Display Co | PPHE HOTEL vs. ELMOS SEMICONDUCTOR | PPHE HOTEL vs. MagnaChip Semiconductor Corp |
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 Correlations module to find global opportunities by holding instruments from different markets.
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