Correlation Between MagnaChip Semiconductor and SCANSOURCE
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and SCANSOURCE 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 SCANSOURCE 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 SCANSOURCE, you can compare the effects of market volatilities on MagnaChip Semiconductor and SCANSOURCE 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 SCANSOURCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and SCANSOURCE.
Diversification Opportunities for MagnaChip Semiconductor and SCANSOURCE
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MagnaChip and SCANSOURCE is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor Corp and SCANSOURCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANSOURCE 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 SCANSOURCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANSOURCE has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and SCANSOURCE go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and SCANSOURCE
Assuming the 90 days trading horizon MagnaChip Semiconductor Corp is expected to under-perform the SCANSOURCE. In addition to that, MagnaChip Semiconductor is 1.22 times more volatile than SCANSOURCE. It trades about -0.06 of its total potential returns per unit of risk. SCANSOURCE is currently generating about 0.08 per unit of volatility. If you would invest 3,500 in SCANSOURCE on September 14, 2024 and sell it today you would earn a total of 1,500 from holding SCANSOURCE or generate 42.86% 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. SCANSOURCE
Performance |
| Timeline |
| MagnaChip Semiconductor |
| SCANSOURCE |
MagnaChip Semiconductor and SCANSOURCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and SCANSOURCE
The main advantage of trading using opposite MagnaChip Semiconductor and SCANSOURCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, SCANSOURCE 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 SCANSOURCE will offset losses from the drop in SCANSOURCE's long position.| MagnaChip Semiconductor vs. QUEEN S ROAD | MagnaChip Semiconductor vs. Nordic Semiconductor ASA | MagnaChip Semiconductor vs. ELMOS SEMICONDUCTOR | MagnaChip Semiconductor vs. BII Railway Transportation |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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