Correlation Between MagnaChip Semiconductor and RTL Group
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and RTL Group 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 RTL Group 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 RTL Group SA, you can compare the effects of market volatilities on MagnaChip Semiconductor and RTL Group 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 RTL Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and RTL Group.
Diversification Opportunities for MagnaChip Semiconductor and RTL Group
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MagnaChip and RTL is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor Corp and RTL Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RTL Group SA 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 RTL Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RTL Group SA has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and RTL Group go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and RTL Group
Assuming the 90 days trading horizon MagnaChip Semiconductor Corp is expected to under-perform the RTL Group. In addition to that, MagnaChip Semiconductor is 1.73 times more volatile than RTL Group SA. It trades about -0.05 of its total potential returns per unit of risk. RTL Group SA is currently generating about -0.05 per unit of volatility. If you would invest 3,016 in RTL Group SA on August 31, 2024 and sell it today you would lose (556.00) from holding RTL Group SA or give up 18.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
MagnaChip Semiconductor Corp vs. RTL Group SA
Performance |
| Timeline |
| MagnaChip Semiconductor |
| RTL Group SA |
MagnaChip Semiconductor and RTL Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and RTL Group
The main advantage of trading using opposite MagnaChip Semiconductor and RTL Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, RTL Group 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 RTL Group will offset losses from the drop in RTL Group's long position.| MagnaChip Semiconductor vs. Apple Inc | MagnaChip Semiconductor vs. Apple Inc | MagnaChip Semiconductor vs. Apple Inc | MagnaChip Semiconductor vs. Apple Inc |
| RTL Group vs. Magnachip Semiconductor | RTL Group vs. Dairy Farm International | RTL Group vs. MagnaChip Semiconductor Corp | RTL Group vs. AUSNUTRIA DAIRY |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Positions Ratings 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 | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |