Correlation Between Thai Beverage and Magnachip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Thai Beverage and Magnachip Semiconductor 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 Thai Beverage and Magnachip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Beverage Public and Magnachip Semiconductor, you can compare the effects of market volatilities on Thai Beverage and Magnachip Semiconductor 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 Thai Beverage with a short position of Magnachip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Beverage and Magnachip Semiconductor.
Diversification Opportunities for Thai Beverage and Magnachip Semiconductor
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thai and Magnachip is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Thai Beverage Public and Magnachip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnachip Semiconductor and Thai Beverage 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 Thai Beverage Public are associated (or correlated) with Magnachip Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnachip Semiconductor has no effect on the direction of Thai Beverage i.e., Thai Beverage and Magnachip Semiconductor go up and down completely randomly.
Pair Corralation between Thai Beverage and Magnachip Semiconductor
Assuming the 90 days horizon Thai Beverage Public is expected to under-perform the Magnachip Semiconductor. In addition to that, Thai Beverage is 1.21 times more volatile than Magnachip Semiconductor. It trades about -0.04 of its total potential returns per unit of risk. Magnachip Semiconductor is currently generating about 0.0 per unit of volatility. If you would invest 386.00 in Magnachip Semiconductor on October 30, 2024 and sell it today you would lose (6.00) from holding Magnachip Semiconductor or give up 1.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Beverage Public vs. Magnachip Semiconductor
Performance |
| Timeline |
| Thai Beverage Public |
| Magnachip Semiconductor |
Thai Beverage and Magnachip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Beverage and Magnachip Semiconductor
The main advantage of trading using opposite Thai Beverage and Magnachip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Beverage position performs unexpectedly, Magnachip Semiconductor 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 Magnachip Semiconductor will offset losses from the drop in Magnachip Semiconductor's long position.| Thai Beverage vs. Mobilezone Holding AG | Thai Beverage vs. Spirent Communications plc | Thai Beverage vs. Entravision Communications | Thai Beverage vs. Merit Medical Systems |
| Magnachip Semiconductor vs. KENEDIX OFFICE INV | Magnachip Semiconductor vs. Neinor Homes SA | Magnachip Semiconductor vs. Taylor Morrison Home | Magnachip Semiconductor vs. INTER CARS SA |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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