Correlation Between MagnaChip Semiconductor and Molina Healthcare
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and Molina Healthcare 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 Molina Healthcare 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 Molina Healthcare, you can compare the effects of market volatilities on MagnaChip Semiconductor and Molina Healthcare 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 Molina Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and Molina Healthcare.
Diversification Opportunities for MagnaChip Semiconductor and Molina Healthcare
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between MagnaChip and Molina is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor Corp and Molina Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Molina Healthcare 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 Molina Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Molina Healthcare has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and Molina Healthcare go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and Molina Healthcare
Assuming the 90 days trading horizon MagnaChip Semiconductor Corp is expected to under-perform the Molina Healthcare. In addition to that, MagnaChip Semiconductor is 1.09 times more volatile than Molina Healthcare. It trades about -0.06 of its total potential returns per unit of risk. Molina Healthcare is currently generating about 0.02 per unit of volatility. If you would invest 27,400 in Molina Healthcare on October 27, 2024 and sell it today you would earn a total of 1,650 from holding Molina Healthcare or generate 6.02% 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. Molina Healthcare
Performance |
| Timeline |
| MagnaChip Semiconductor |
| Molina Healthcare |
MagnaChip Semiconductor and Molina Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and Molina Healthcare
The main advantage of trading using opposite MagnaChip Semiconductor and Molina Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, Molina Healthcare 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 Molina Healthcare will offset losses from the drop in Molina Healthcare's long position.| MagnaChip Semiconductor vs. JAPAN AIRLINES | MagnaChip Semiconductor vs. CHINA SOUTHN AIR H | MagnaChip Semiconductor vs. Ryanair Holdings plc | MagnaChip Semiconductor vs. FORWARD AIR P |
| Molina Healthcare vs. HK Electric Investments | Molina Healthcare vs. Xenia Hotels Resorts | Molina Healthcare vs. Host Hotels Resorts | Molina Healthcare vs. Scottish Mortgage Investment |
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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