Correlation Between Viemed Healthcare and MagnaChip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Viemed Healthcare 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 Viemed Healthcare and MagnaChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Viemed Healthcare and MagnaChip Semiconductor, you can compare the effects of market volatilities on Viemed Healthcare 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 Viemed Healthcare with a short position of MagnaChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Viemed Healthcare and MagnaChip Semiconductor.
Diversification Opportunities for Viemed Healthcare and MagnaChip Semiconductor
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Viemed and MagnaChip is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Viemed Healthcare and MagnaChip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MagnaChip Semiconductor and Viemed Healthcare 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 Viemed Healthcare 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 Viemed Healthcare i.e., Viemed Healthcare and MagnaChip Semiconductor go up and down completely randomly.
Pair Corralation between Viemed Healthcare and MagnaChip Semiconductor
Considering the 90-day investment horizon Viemed Healthcare is expected to generate 1.13 times more return on investment than MagnaChip Semiconductor. However, Viemed Healthcare is 1.13 times more volatile than MagnaChip Semiconductor. It trades about 0.03 of its potential returns per unit of risk. MagnaChip Semiconductor is currently generating about -0.05 per unit of risk. If you would invest 725.00 in Viemed Healthcare on September 4, 2024 and sell it today you would earn a total of 174.00 from holding Viemed Healthcare or generate 24.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Viemed Healthcare vs. MagnaChip Semiconductor
Performance |
| Timeline |
| Viemed Healthcare |
| MagnaChip Semiconductor |
Viemed Healthcare and MagnaChip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Viemed Healthcare and MagnaChip Semiconductor
The main advantage of trading using opposite Viemed Healthcare and MagnaChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Viemed Healthcare 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.| Viemed Healthcare vs. Baxter International | Viemed Healthcare vs. West Pharmaceutical Services | Viemed Healthcare vs. ResMed Inc | Viemed Healthcare vs. The Cooper Companies, |
| MagnaChip Semiconductor vs. CEVA Inc | MagnaChip Semiconductor vs. MACOM Technology Solutions | MagnaChip Semiconductor vs. FormFactor | MagnaChip Semiconductor vs. MaxLinear |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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