Correlation Between MagnaChip Semiconductor and CCC SA

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Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and CCC SA 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 CCC SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MagnaChip Semiconductor Corp and CCC SA, you can compare the effects of market volatilities on MagnaChip Semiconductor and CCC SA 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 CCC SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and CCC SA.

Diversification Opportunities for MagnaChip Semiconductor and CCC SA

-0.15
  Correlation Coefficient

Good diversification

The 3 months correlation between MagnaChip and CCC is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor Corp and CCC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCC SA 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 Corp are associated (or correlated) with CCC SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCC SA has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and CCC SA go up and down completely randomly.

Pair Corralation between MagnaChip Semiconductor and CCC SA

Assuming the 90 days trading horizon MagnaChip Semiconductor Corp is expected to under-perform the CCC SA. In addition to that, MagnaChip Semiconductor is 1.39 times more volatile than CCC SA. It trades about -0.03 of its total potential returns per unit of risk. CCC SA is currently generating about 0.07 per unit of volatility. If you would invest  3,926  in CCC SA on October 23, 2024 and sell it today you would earn a total of  356.00  from holding CCC SA or generate 9.07% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy98.33%
ValuesDaily Returns

MagnaChip Semiconductor Corp  vs.  CCC SA

 Performance 
       Timeline  
MagnaChip Semiconductor 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days MagnaChip Semiconductor Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
CCC SA 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in CCC SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CCC SA may actually be approaching a critical reversion point that can send shares even higher in February 2025.

MagnaChip Semiconductor and CCC SA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with MagnaChip Semiconductor and CCC SA

The main advantage of trading using opposite MagnaChip Semiconductor and CCC SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, CCC SA 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 CCC SA will offset losses from the drop in CCC SA's long position.
The idea behind MagnaChip Semiconductor Corp and CCC SA 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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