Correlation Between MagnaChip Semiconductor and COLUMBIA SPORTSWEAR
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR, you can compare the effects of market volatilities on MagnaChip Semiconductor and COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and COLUMBIA SPORTSWEAR.
Diversification Opportunities for MagnaChip Semiconductor and COLUMBIA SPORTSWEAR
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MagnaChip and COLUMBIA is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor Corp and COLUMBIA SPORTSWEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COLUMBIA SPORTSWEAR has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and COLUMBIA SPORTSWEAR go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and COLUMBIA SPORTSWEAR
Assuming the 90 days trading horizon MagnaChip Semiconductor Corp is expected to under-perform the COLUMBIA SPORTSWEAR. In addition to that, MagnaChip Semiconductor is 1.86 times more volatile than COLUMBIA SPORTSWEAR. It trades about -0.04 of its total potential returns per unit of risk. COLUMBIA SPORTSWEAR is currently generating about 0.04 per unit of volatility. If you would invest 8,300 in COLUMBIA SPORTSWEAR on October 25, 2024 and sell it today you would earn a total of 50.00 from holding COLUMBIA SPORTSWEAR or generate 0.6% 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. COLUMBIA SPORTSWEAR
Performance |
| Timeline |
| MagnaChip Semiconductor |
| COLUMBIA SPORTSWEAR |
MagnaChip Semiconductor and COLUMBIA SPORTSWEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and COLUMBIA SPORTSWEAR
The main advantage of trading using opposite MagnaChip Semiconductor and COLUMBIA SPORTSWEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, COLUMBIA SPORTSWEAR 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 COLUMBIA SPORTSWEAR will offset losses from the drop in COLUMBIA SPORTSWEAR's long position.| MagnaChip Semiconductor vs. Kaiser Aluminum | MagnaChip Semiconductor vs. Transport International Holdings | MagnaChip Semiconductor vs. Osisko Metals | MagnaChip Semiconductor vs. ARDAGH METAL PACDL 0001 |
| COLUMBIA SPORTSWEAR vs. Commercial Vehicle Group | COLUMBIA SPORTSWEAR vs. MOVIE GAMES SA | COLUMBIA SPORTSWEAR vs. GEELY AUTOMOBILE | COLUMBIA SPORTSWEAR vs. American Public Education |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |