Correlation Between MagnaChip Semiconductor and PARKWAY LIFE
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and PARKWAY LIFE 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 PARKWAY LIFE 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 PARKWAY LIFE REAL, you can compare the effects of market volatilities on MagnaChip Semiconductor and PARKWAY LIFE 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 PARKWAY LIFE. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and PARKWAY LIFE.
Diversification Opportunities for MagnaChip Semiconductor and PARKWAY LIFE
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MagnaChip and PARKWAY is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor Corp and PARKWAY LIFE REAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKWAY LIFE REAL 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 PARKWAY LIFE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKWAY LIFE REAL has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and PARKWAY LIFE go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and PARKWAY LIFE
Assuming the 90 days trading horizon MagnaChip Semiconductor Corp is expected to under-perform the PARKWAY LIFE. In addition to that, MagnaChip Semiconductor is 1.35 times more volatile than PARKWAY LIFE REAL. It trades about -0.03 of its total potential returns per unit of risk. PARKWAY LIFE REAL is currently generating about 0.05 per unit of volatility. If you would invest 224.00 in PARKWAY LIFE REAL on September 1, 2024 and sell it today you would earn a total of 39.00 from holding PARKWAY LIFE REAL or generate 17.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.48% |
| Values | Daily Returns |
MagnaChip Semiconductor Corp vs. PARKWAY LIFE REAL
Performance |
| Timeline |
| MagnaChip Semiconductor |
| PARKWAY LIFE REAL |
MagnaChip Semiconductor and PARKWAY LIFE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and PARKWAY LIFE
The main advantage of trading using opposite MagnaChip Semiconductor and PARKWAY LIFE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, PARKWAY LIFE 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 PARKWAY LIFE will offset losses from the drop in PARKWAY LIFE's long position.| MagnaChip Semiconductor vs. Cardinal Health | MagnaChip Semiconductor vs. SMA Solar Technology | MagnaChip Semiconductor vs. Ramsay Health Care | MagnaChip Semiconductor vs. AECOM TECHNOLOGY |
| PARKWAY LIFE vs. ON SEMICONDUCTOR | PARKWAY LIFE vs. NXP Semiconductors NV | PARKWAY LIFE vs. UNIVMUSIC GRPADR050 | PARKWAY LIFE 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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