Correlation Between MagnaChip Semiconductor and Chengdu PUTIAN
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and Chengdu PUTIAN 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 Chengdu PUTIAN 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 Chengdu PUTIAN Telecommunications, you can compare the effects of market volatilities on MagnaChip Semiconductor and Chengdu PUTIAN 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 Chengdu PUTIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and Chengdu PUTIAN.
Diversification Opportunities for MagnaChip Semiconductor and Chengdu PUTIAN
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MagnaChip and Chengdu is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor Corp and Chengdu PUTIAN Telecommunicati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chengdu PUTIAN Telec 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 Chengdu PUTIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chengdu PUTIAN Telec has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and Chengdu PUTIAN go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and Chengdu PUTIAN
Assuming the 90 days trading horizon MagnaChip Semiconductor is expected to generate 9.09 times less return on investment than Chengdu PUTIAN. But when comparing it to its historical volatility, MagnaChip Semiconductor Corp is 1.21 times less risky than Chengdu PUTIAN. It trades about 0.02 of its potential returns per unit of risk. Chengdu PUTIAN Telecommunications is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 6.60 in Chengdu PUTIAN Telecommunications on October 16, 2024 and sell it today you would earn a total of 0.70 from holding Chengdu PUTIAN Telecommunications or generate 10.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MagnaChip Semiconductor Corp vs. Chengdu PUTIAN Telecommunicati
Performance |
| Timeline |
| MagnaChip Semiconductor |
| Chengdu PUTIAN Telec |
MagnaChip Semiconductor and Chengdu PUTIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and Chengdu PUTIAN
The main advantage of trading using opposite MagnaChip Semiconductor and Chengdu PUTIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, Chengdu PUTIAN 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 Chengdu PUTIAN will offset losses from the drop in Chengdu PUTIAN's long position.| MagnaChip Semiconductor vs. Calibre Mining Corp | MagnaChip Semiconductor vs. Fast Retailing Co | MagnaChip Semiconductor vs. Retail Estates NV | MagnaChip Semiconductor vs. RETAIL FOOD GROUP |
| Chengdu PUTIAN vs. MagnaChip Semiconductor Corp | Chengdu PUTIAN vs. SYSTEMAIR AB | Chengdu PUTIAN vs. FAIR ISAAC | Chengdu PUTIAN vs. SEALED AIR |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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