Correlation Between UNITED UTILITIES and MagnaChip Semiconductor
Can any of the company-specific risk be diversified away by investing in both UNITED UTILITIES 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 UNITED UTILITIES and MagnaChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNITED UTILITIES GR and MagnaChip Semiconductor Corp, you can compare the effects of market volatilities on UNITED UTILITIES 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 UNITED UTILITIES with a short position of MagnaChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITED UTILITIES and MagnaChip Semiconductor.
Diversification Opportunities for UNITED UTILITIES and MagnaChip Semiconductor
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between UNITED and MagnaChip is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding UNITED UTILITIES GR and MagnaChip Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MagnaChip Semiconductor and UNITED UTILITIES 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 UNITED UTILITIES GR 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 UNITED UTILITIES i.e., UNITED UTILITIES and MagnaChip Semiconductor go up and down completely randomly.
Pair Corralation between UNITED UTILITIES and MagnaChip Semiconductor
Assuming the 90 days trading horizon UNITED UTILITIES GR is expected to generate 0.59 times more return on investment than MagnaChip Semiconductor. However, UNITED UTILITIES GR is 1.69 times less risky than MagnaChip Semiconductor. It trades about 0.01 of its potential returns per unit of risk. MagnaChip Semiconductor Corp is currently generating about -0.06 per unit of risk. If you would invest 1,099 in UNITED UTILITIES GR on October 27, 2024 and sell it today you would earn a total of 41.00 from holding UNITED UTILITIES GR or generate 3.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNITED UTILITIES GR vs. MagnaChip Semiconductor Corp
Performance |
| Timeline |
| UNITED UTILITIES |
| MagnaChip Semiconductor |
UNITED UTILITIES and MagnaChip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNITED UTILITIES and MagnaChip Semiconductor
The main advantage of trading using opposite UNITED UTILITIES and MagnaChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITED UTILITIES 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.| UNITED UTILITIES vs. Apple Inc | UNITED UTILITIES vs. Apple Inc | UNITED UTILITIES vs. Apple Inc | UNITED UTILITIES vs. Apple Inc |
| MagnaChip Semiconductor vs. JAPAN AIRLINES | MagnaChip Semiconductor vs. CHINA SOUTHN AIR H | MagnaChip Semiconductor vs. Ryanair Holdings plc | MagnaChip Semiconductor vs. FORWARD AIR P |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |