Correlation Between Vulcan Materials and MagnaChip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Vulcan Materials 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 Vulcan Materials and MagnaChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vulcan Materials and MagnaChip Semiconductor Corp, you can compare the effects of market volatilities on Vulcan Materials 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 Vulcan Materials with a short position of MagnaChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vulcan Materials and MagnaChip Semiconductor.
Diversification Opportunities for Vulcan Materials and MagnaChip Semiconductor
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vulcan and MagnaChip is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Vulcan Materials and MagnaChip Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MagnaChip Semiconductor and Vulcan Materials 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 Vulcan Materials 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 Vulcan Materials i.e., Vulcan Materials and MagnaChip Semiconductor go up and down completely randomly.
Pair Corralation between Vulcan Materials and MagnaChip Semiconductor
Assuming the 90 days horizon Vulcan Materials is expected to generate 0.65 times more return on investment than MagnaChip Semiconductor. However, Vulcan Materials is 1.54 times less risky than MagnaChip Semiconductor. It trades about 0.07 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 19,732 in Vulcan Materials on September 4, 2024 and sell it today you would earn a total of 7,468 from holding Vulcan Materials or generate 37.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vulcan Materials vs. MagnaChip Semiconductor Corp
Performance |
| Timeline |
| Vulcan Materials |
| MagnaChip Semiconductor |
Vulcan Materials and MagnaChip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vulcan Materials and MagnaChip Semiconductor
The main advantage of trading using opposite Vulcan Materials and MagnaChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vulcan Materials 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.| Vulcan Materials vs. Superior Plus Corp | Vulcan Materials vs. NMI Holdings | Vulcan Materials vs. Origin Agritech | Vulcan Materials vs. SIVERS SEMICONDUCTORS AB |
| MagnaChip Semiconductor vs. VIRGIN WINES UK | MagnaChip Semiconductor vs. CHINA TONTINE WINES | MagnaChip Semiconductor vs. TROPHY GAMES DEV | MagnaChip Semiconductor vs. NAKED WINES PLC |
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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