Correlation Between MagnaChip Semiconductor and Siltronic
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and Siltronic 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 Siltronic 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 Siltronic AG, you can compare the effects of market volatilities on MagnaChip Semiconductor and Siltronic 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 Siltronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and Siltronic.
Diversification Opportunities for MagnaChip Semiconductor and Siltronic
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MagnaChip and Siltronic is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor Corp and Siltronic AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siltronic AG 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 Siltronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siltronic AG has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and Siltronic go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and Siltronic
Assuming the 90 days trading horizon MagnaChip Semiconductor Corp is expected to generate 2.17 times more return on investment than Siltronic. However, MagnaChip Semiconductor is 2.17 times more volatile than Siltronic AG. It trades about -0.01 of its potential returns per unit of risk. Siltronic AG is currently generating about -0.23 per unit of risk. If you would invest 408.00 in MagnaChip Semiconductor Corp on September 1, 2024 and sell it today you would lose (10.00) from holding MagnaChip Semiconductor Corp or give up 2.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
MagnaChip Semiconductor Corp vs. Siltronic AG
Performance |
| Timeline |
| MagnaChip Semiconductor |
| Siltronic AG |
MagnaChip Semiconductor and Siltronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and Siltronic
The main advantage of trading using opposite MagnaChip Semiconductor and Siltronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, Siltronic 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 Siltronic will offset losses from the drop in Siltronic's long position.| MagnaChip Semiconductor vs. Cardinal Health | MagnaChip Semiconductor vs. SMA Solar Technology | MagnaChip Semiconductor vs. Ramsay Health Care | MagnaChip Semiconductor vs. AECOM TECHNOLOGY |
| Siltronic vs. COMBA TELECOM SYST | Siltronic vs. United States Steel | Siltronic vs. Cogent Communications Holdings | Siltronic vs. NIPPON STEEL SPADR |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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