Correlation Between MagnaChip Semiconductor and ELEMENT FLEET
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and ELEMENT FLEET 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 ELEMENT FLEET 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 ELEMENT FLEET MGMT, you can compare the effects of market volatilities on MagnaChip Semiconductor and ELEMENT FLEET 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 ELEMENT FLEET. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and ELEMENT FLEET.
Diversification Opportunities for MagnaChip Semiconductor and ELEMENT FLEET
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between MagnaChip and ELEMENT is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor Corp and ELEMENT FLEET MGMT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELEMENT FLEET MGMT 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 ELEMENT FLEET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELEMENT FLEET MGMT has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and ELEMENT FLEET go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and ELEMENT FLEET
Assuming the 90 days trading horizon MagnaChip Semiconductor Corp is expected to under-perform the ELEMENT FLEET. In addition to that, MagnaChip Semiconductor is 1.23 times more volatile than ELEMENT FLEET MGMT. It trades about -0.05 of its total potential returns per unit of risk. ELEMENT FLEET MGMT is currently generating about 0.07 per unit of volatility. If you would invest 1,435 in ELEMENT FLEET MGMT on September 4, 2024 and sell it today you would earn a total of 515.00 from holding ELEMENT FLEET MGMT or generate 35.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
MagnaChip Semiconductor Corp vs. ELEMENT FLEET MGMT
Performance |
| Timeline |
| MagnaChip Semiconductor |
| ELEMENT FLEET MGMT |
MagnaChip Semiconductor and ELEMENT FLEET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and ELEMENT FLEET
The main advantage of trading using opposite MagnaChip Semiconductor and ELEMENT FLEET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, ELEMENT FLEET 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 ELEMENT FLEET will offset losses from the drop in ELEMENT FLEET's long position.| MagnaChip Semiconductor vs. VIRGIN WINES UK | MagnaChip Semiconductor vs. CHINA TONTINE WINES | MagnaChip Semiconductor vs. TROPHY GAMES DEV | MagnaChip Semiconductor vs. NAKED WINES PLC |
| ELEMENT FLEET vs. Air Lease | ELEMENT FLEET vs. UNITED RENTALS | ELEMENT FLEET vs. MGIC INVESTMENT | ELEMENT FLEET vs. PennantPark Investment |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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