Correlation Between Yageo Corp and Macronix International

Can any of the company-specific risk be diversified away by investing in both Yageo Corp and Macronix International 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 Yageo Corp and Macronix International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Yageo Corp and Macronix International Co, you can compare the effects of market volatilities on Yageo Corp and Macronix International 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 Yageo Corp with a short position of Macronix International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yageo Corp and Macronix International.

Diversification Opportunities for Yageo Corp and Macronix International

0.28

Correlation Coefficient

Yageo Corp  Macronix International

Modest diversification

The 3 months correlation between Yageo and Macronix is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Yageo Corp and Macronix International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macronix International and Yageo Corp 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 Yageo Corp are associated (or correlated) with Macronix International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macronix International has no effect on the direction of Yageo Corp i.e., Yageo Corp and Macronix International go up and down completely randomly.

Pair Corralation between Yageo Corp and Macronix International

Assuming the 90 days trading horizon Yageo Corp is expected to generate 8.24 times less return on investment than Macronix International. But when comparing it to its historical volatility, Yageo Corp is 1.17 times less risky than Macronix International. It trades about 0.01 of its potential returns per unit of risk. Macronix International Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,040  in Macronix International Co on December 23, 2024 and sell it today you would earn a total of  125.00  from holding Macronix International Co or generate 6.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Yageo Corp  vs.  Macronix International Co

Yageo Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yageo Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Yageo Corp is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Macronix International

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Macronix International Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Macronix International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Yageo Corp and Macronix International

The main advantage of trading using opposite Yageo Corp and Macronix International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yageo Corp position performs unexpectedly, Macronix International 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 Macronix International will offset losses from the drop in Macronix International's long position.

The idea behind Yageo Corp and Macronix International Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.