Correlation Between MagnaChip Semiconductor and Cass Information
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and Cass Information 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 Cass Information 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 Cass Information Systems, you can compare the effects of market volatilities on MagnaChip Semiconductor and Cass Information 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 Cass Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and Cass Information.
Diversification Opportunities for MagnaChip Semiconductor and Cass Information
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MagnaChip and Cass is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor Corp and Cass Information Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cass Information Systems 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 Cass Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cass Information Systems has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and Cass Information go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and Cass Information
Assuming the 90 days trading horizon MagnaChip Semiconductor Corp is expected to generate 1.71 times more return on investment than Cass Information. However, MagnaChip Semiconductor is 1.71 times more volatile than Cass Information Systems. It trades about -0.02 of its potential returns per unit of risk. Cass Information Systems is currently generating about -0.24 per unit of risk. If you would invest 392.00 in MagnaChip Semiconductor Corp on October 11, 2024 and sell it today you would lose (6.00) from holding MagnaChip Semiconductor Corp or give up 1.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MagnaChip Semiconductor Corp vs. Cass Information Systems
Performance |
| Timeline |
| MagnaChip Semiconductor |
| Cass Information Systems |
MagnaChip Semiconductor and Cass Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and Cass Information
The main advantage of trading using opposite MagnaChip Semiconductor and Cass Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, Cass Information 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 Cass Information will offset losses from the drop in Cass Information's long position.| MagnaChip Semiconductor vs. Focus Home Interactive | MagnaChip Semiconductor vs. Eidesvik Offshore ASA | MagnaChip Semiconductor vs. UNITED UTILITIES GR | MagnaChip Semiconductor vs. Algonquin Power Utilities |
| Cass Information vs. BE Semiconductor Industries | Cass Information vs. Amkor Technology | Cass Information vs. TOREX SEMICONDUCTOR LTD | Cass Information 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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