Correlation Between MagnaChip Semiconductor and SBM OFFSHORE
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and SBM OFFSHORE 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 SBM OFFSHORE 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 SBM OFFSHORE, you can compare the effects of market volatilities on MagnaChip Semiconductor and SBM OFFSHORE 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 SBM OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and SBM OFFSHORE.
Diversification Opportunities for MagnaChip Semiconductor and SBM OFFSHORE
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MagnaChip and SBM is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor Corp and SBM OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBM OFFSHORE 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 SBM OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBM OFFSHORE has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and SBM OFFSHORE go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and SBM OFFSHORE
Assuming the 90 days trading horizon MagnaChip Semiconductor Corp is expected to under-perform the SBM OFFSHORE. In addition to that, MagnaChip Semiconductor is 1.01 times more volatile than SBM OFFSHORE. It trades about -0.05 of its total potential returns per unit of risk. SBM OFFSHORE is currently generating about 0.18 per unit of volatility. If you would invest 1,675 in SBM OFFSHORE on November 1, 2024 and sell it today you would earn a total of 103.00 from holding SBM OFFSHORE or generate 6.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
MagnaChip Semiconductor Corp vs. SBM OFFSHORE
Performance |
| Timeline |
| MagnaChip Semiconductor |
| SBM OFFSHORE |
MagnaChip Semiconductor and SBM OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and SBM OFFSHORE
The main advantage of trading using opposite MagnaChip Semiconductor and SBM OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, SBM OFFSHORE 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 SBM OFFSHORE will offset losses from the drop in SBM OFFSHORE's long position.| MagnaChip Semiconductor vs. Norwegian Air Shuttle | MagnaChip Semiconductor vs. SEALED AIR | MagnaChip Semiconductor vs. NH HOTEL GROUP | MagnaChip Semiconductor vs. Choice Hotels International |
| SBM OFFSHORE vs. Sunstone Hotel Investors | SBM OFFSHORE vs. VULCAN MATERIALS | SBM OFFSHORE vs. Eagle Materials | SBM OFFSHORE vs. INTERCONT HOTELS |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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