Correlation Between Magnachip Semiconductor and GALP ENERGIA

Can any of the company-specific risk be diversified away by investing in both Magnachip Semiconductor and GALP ENERGIA 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 Magnachip Semiconductor and GALP ENERGIA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Magnachip Semiconductor and GALP ENERGIA B , you can compare the effects of market volatilities on Magnachip Semiconductor and GALP ENERGIA 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 Magnachip Semiconductor with a short position of GALP ENERGIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnachip Semiconductor and GALP ENERGIA.

Diversification Opportunities for Magnachip Semiconductor and GALP ENERGIA

0.0

Correlation Coefficient

Magnachip Semiconductor  GALP ENERGIA

Pay attention - limited upside

The 3 months correlation between Magnachip and GALP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Magnachip Semiconductor and GALP ENERGIA B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GALP ENERGIA B and Magnachip Semiconductor 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 Magnachip Semiconductor are associated (or correlated) with GALP ENERGIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GALP ENERGIA B has no effect on the direction of Magnachip Semiconductor i.e., Magnachip Semiconductor and GALP ENERGIA go up and down completely randomly.

Pair Corralation between Magnachip Semiconductor and GALP ENERGIA

If you would invest  0.00  in GALP ENERGIA B on December 23, 2024 and sell it today you would earn a total of  0.00  from holding GALP ENERGIA B or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.64%
Values	Daily Returns

Magnachip Semiconductor  vs.  GALP ENERGIA B

Magnachip Semiconductor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Magnachip Semiconductor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Magnachip Semiconductor is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

GALP ENERGIA B

Risk-Adjusted Performance

Very Weak

Over the last 90 days GALP ENERGIA B has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, GALP ENERGIA is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Magnachip Semiconductor and GALP ENERGIA

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

The idea behind Magnachip Semiconductor and GALP ENERGIA B 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.