Correlation Between MagnaChip Semiconductor and MAANSHAN IRON
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and MAANSHAN IRON 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 MAANSHAN IRON 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 MAANSHAN IRON H , you can compare the effects of market volatilities on MagnaChip Semiconductor and MAANSHAN IRON 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 MAANSHAN IRON. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and MAANSHAN IRON.
Diversification Opportunities for MagnaChip Semiconductor and MAANSHAN IRON
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between MagnaChip and MAANSHAN is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor Corp and MAANSHAN IRON H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAANSHAN IRON H 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 MAANSHAN IRON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAANSHAN IRON H has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and MAANSHAN IRON go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and MAANSHAN IRON
Assuming the 90 days trading horizon MagnaChip Semiconductor Corp is expected to under-perform the MAANSHAN IRON. But the stock apears to be less risky and, when comparing its historical volatility, MagnaChip Semiconductor Corp is 1.76 times less risky than MAANSHAN IRON. The stock trades about -0.02 of its potential returns per unit of risk. The MAANSHAN IRON H is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 12.00 in MAANSHAN IRON H on October 26, 2024 and sell it today you would earn a total of 9.00 from holding MAANSHAN IRON H or generate 75.0% 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. MAANSHAN IRON H
Performance |
| Timeline |
| MagnaChip Semiconductor |
| MAANSHAN IRON H |
MagnaChip Semiconductor and MAANSHAN IRON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and MAANSHAN IRON
The main advantage of trading using opposite MagnaChip Semiconductor and MAANSHAN IRON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, MAANSHAN IRON 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 MAANSHAN IRON will offset losses from the drop in MAANSHAN IRON's long position.| MagnaChip Semiconductor vs. ZINC MEDIA GR | MagnaChip Semiconductor vs. ANTA SPORTS PRODUCT | MagnaChip Semiconductor vs. Harmony Gold Mining | MagnaChip Semiconductor vs. RCS MediaGroup SpA |
| MAANSHAN IRON vs. RCS MediaGroup SpA | MAANSHAN IRON vs. Nexstar Media Group | MAANSHAN IRON vs. MagnaChip Semiconductor Corp | MAANSHAN IRON vs. Nordic Semiconductor ASA |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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