Correlation Between MagnaChip Semiconductor and Minerals Technologies
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and Minerals Technologies 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 Minerals Technologies 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 Minerals Technologies, you can compare the effects of market volatilities on MagnaChip Semiconductor and Minerals Technologies 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 Minerals Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and Minerals Technologies.
Diversification Opportunities for MagnaChip Semiconductor and Minerals Technologies
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between MagnaChip and Minerals is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor Corp and Minerals Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerals Technologies 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 Minerals Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerals Technologies has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and Minerals Technologies go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and Minerals Technologies
Assuming the 90 days trading horizon MagnaChip Semiconductor Corp is expected to under-perform the Minerals Technologies. In addition to that, MagnaChip Semiconductor is 1.34 times more volatile than Minerals Technologies. It trades about -0.04 of its total potential returns per unit of risk. Minerals Technologies is currently generating about 0.04 per unit of volatility. If you would invest 7,350 in Minerals Technologies on October 25, 2024 and sell it today you would earn a total of 50.00 from holding Minerals Technologies or generate 0.68% 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. Minerals Technologies
Performance |
| Timeline |
| MagnaChip Semiconductor |
| Minerals Technologies |
MagnaChip Semiconductor and Minerals Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and Minerals Technologies
The main advantage of trading using opposite MagnaChip Semiconductor and Minerals Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, Minerals Technologies 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 Minerals Technologies will offset losses from the drop in Minerals Technologies' 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 |
| Minerals Technologies vs. MagnaChip Semiconductor Corp | Minerals Technologies vs. Tower Semiconductor | Minerals Technologies vs. China Datang | Minerals Technologies vs. Elmos Semiconductor SE |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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