Correlation Between Wisekey International and MagnaChip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Wisekey International 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 Wisekey International and MagnaChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wisekey International Holding and MagnaChip Semiconductor, you can compare the effects of market volatilities on Wisekey International 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 Wisekey International with a short position of MagnaChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wisekey International and MagnaChip Semiconductor.
Diversification Opportunities for Wisekey International and MagnaChip Semiconductor
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wisekey and MagnaChip is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Wisekey International Holding and MagnaChip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MagnaChip Semiconductor and Wisekey International 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 Wisekey International Holding 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 Wisekey International i.e., Wisekey International and MagnaChip Semiconductor go up and down completely randomly.
Pair Corralation between Wisekey International and MagnaChip Semiconductor
Given the investment horizon of 90 days Wisekey International Holding is expected to generate 3.4 times more return on investment than MagnaChip Semiconductor. However, Wisekey International is 3.4 times more volatile than MagnaChip Semiconductor. It trades about 0.36 of its potential returns per unit of risk. MagnaChip Semiconductor is currently generating about 0.06 per unit of risk. If you would invest 175.00 in Wisekey International Holding on September 14, 2024 and sell it today you would earn a total of 153.00 from holding Wisekey International Holding or generate 87.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wisekey International Holding vs. MagnaChip Semiconductor
Performance |
| Timeline |
| Wisekey International |
| MagnaChip Semiconductor |
Wisekey International and MagnaChip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wisekey International and MagnaChip Semiconductor
The main advantage of trading using opposite Wisekey International and MagnaChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wisekey International 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.| Wisekey International vs. SemiLEDS | Wisekey International vs. GSI Technology | Wisekey International vs. SEALSQ Corp | Wisekey International vs. WiSA Technologies |
| MagnaChip Semiconductor vs. ON Semiconductor | MagnaChip Semiconductor vs. Monolithic Power Systems | MagnaChip Semiconductor vs. Globalfoundries | MagnaChip Semiconductor vs. Wisekey International Holding |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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