Correlation Between MagnaChip Semiconductor and THAI BEVERAGE
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and THAI BEVERAGE 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 THAI BEVERAGE 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 THAI BEVERAGE, you can compare the effects of market volatilities on MagnaChip Semiconductor and THAI BEVERAGE 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 THAI BEVERAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and THAI BEVERAGE.
Diversification Opportunities for MagnaChip Semiconductor and THAI BEVERAGE
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MagnaChip and THAI is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor Corp and THAI BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THAI BEVERAGE 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 THAI BEVERAGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THAI BEVERAGE has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and THAI BEVERAGE go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and THAI BEVERAGE
Assuming the 90 days trading horizon MagnaChip Semiconductor is expected to generate 1.28 times less return on investment than THAI BEVERAGE. In addition to that, MagnaChip Semiconductor is 1.21 times more volatile than THAI BEVERAGE. It trades about 0.07 of its total potential returns per unit of risk. THAI BEVERAGE is currently generating about 0.11 per unit of volatility. If you would invest 36.00 in THAI BEVERAGE on September 14, 2024 and sell it today you would earn a total of 2.00 from holding THAI BEVERAGE or generate 5.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MagnaChip Semiconductor Corp vs. THAI BEVERAGE
Performance |
| Timeline |
| MagnaChip Semiconductor |
| THAI BEVERAGE |
MagnaChip Semiconductor and THAI BEVERAGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and THAI BEVERAGE
The main advantage of trading using opposite MagnaChip Semiconductor and THAI BEVERAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, THAI BEVERAGE 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 THAI BEVERAGE will offset losses from the drop in THAI BEVERAGE'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 |
| THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc | THAI BEVERAGE vs. Apple Inc |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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