Correlation Between Yancoal Australia and MagnaChip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Yancoal Australia 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 Yancoal Australia and MagnaChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yancoal Australia and MagnaChip Semiconductor Corp, you can compare the effects of market volatilities on Yancoal Australia 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 Yancoal Australia with a short position of MagnaChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yancoal Australia and MagnaChip Semiconductor.
Diversification Opportunities for Yancoal Australia and MagnaChip Semiconductor
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yancoal and MagnaChip is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Yancoal Australia and MagnaChip Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MagnaChip Semiconductor and Yancoal Australia 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 Yancoal Australia 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 Yancoal Australia i.e., Yancoal Australia and MagnaChip Semiconductor go up and down completely randomly.
Pair Corralation between Yancoal Australia and MagnaChip Semiconductor
Assuming the 90 days trading horizon Yancoal Australia is expected to generate 1.36 times more return on investment than MagnaChip Semiconductor. However, Yancoal Australia is 1.36 times more volatile than MagnaChip Semiconductor Corp. It trades about 0.0 of its potential returns per unit of risk. MagnaChip Semiconductor Corp is currently generating about -0.02 per unit of risk. If you would invest 403.00 in Yancoal Australia on September 2, 2024 and sell it today you would lose (30.00) from holding Yancoal Australia or give up 7.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yancoal Australia vs. MagnaChip Semiconductor Corp
Performance |
| Timeline |
| Yancoal Australia |
| MagnaChip Semiconductor |
Yancoal Australia and MagnaChip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yancoal Australia and MagnaChip Semiconductor
The main advantage of trading using opposite Yancoal Australia and MagnaChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yancoal Australia 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.| Yancoal Australia vs. LG Display Co | Yancoal Australia vs. Hollywood Bowl Group | Yancoal Australia vs. Consolidated Communications Holdings | Yancoal Australia vs. Flutter Entertainment 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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