Correlation Between MagnaChip Semiconductor and Lincoln Electric
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and Lincoln Electric 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 Lincoln Electric 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 Lincoln Electric Holdings, you can compare the effects of market volatilities on MagnaChip Semiconductor and Lincoln Electric 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 Lincoln Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and Lincoln Electric.
Diversification Opportunities for MagnaChip Semiconductor and Lincoln Electric
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MagnaChip and Lincoln is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor Corp and Lincoln Electric Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lincoln Electric Holdings 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 Lincoln Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lincoln Electric Holdings has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and Lincoln Electric go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and Lincoln Electric
Assuming the 90 days trading horizon MagnaChip Semiconductor Corp is expected to generate 2.03 times more return on investment than Lincoln Electric. However, MagnaChip Semiconductor is 2.03 times more volatile than Lincoln Electric Holdings. It trades about 0.16 of its potential returns per unit of risk. Lincoln Electric Holdings is currently generating about -0.03 per unit of risk. If you would invest 354.00 in MagnaChip Semiconductor Corp on September 12, 2024 and sell it today you would earn a total of 38.00 from holding MagnaChip Semiconductor Corp or generate 10.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
MagnaChip Semiconductor Corp vs. Lincoln Electric Holdings
Performance |
| Timeline |
| MagnaChip Semiconductor |
| Lincoln Electric Holdings |
MagnaChip Semiconductor and Lincoln Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and Lincoln Electric
The main advantage of trading using opposite MagnaChip Semiconductor and Lincoln Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, Lincoln Electric 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 Lincoln Electric will offset losses from the drop in Lincoln Electric's long position.| MagnaChip Semiconductor vs. Apple Inc | MagnaChip Semiconductor vs. Apple Inc | MagnaChip Semiconductor vs. Apple Inc | MagnaChip Semiconductor vs. Apple Inc |
| Lincoln Electric vs. Rayonier Advanced Materials | Lincoln Electric vs. Pembina Pipeline Corp | Lincoln Electric vs. VULCAN MATERIALS | Lincoln Electric vs. Southwest Airlines Co |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Commodity Directory Find actively traded commodities issued by global exchanges |