Correlation Between MagnaChip Semiconductor and GRIFFIN MINING

Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and GRIFFIN MINING 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 GRIFFIN MINING 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 GRIFFIN MINING LTD, you can compare the effects of market volatilities on MagnaChip Semiconductor and GRIFFIN MINING 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 GRIFFIN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and GRIFFIN MINING.

Diversification Opportunities for MagnaChip Semiconductor and GRIFFIN MINING

0.54

Correlation Coefficient

MagnaChip Semiconductor  GRIFFIN MINING

Very weak diversification

The 3 months correlation between MagnaChip and GRIFFIN is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor Corp and GRIFFIN MINING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRIFFIN MINING LTD 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 GRIFFIN MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRIFFIN MINING LTD has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and GRIFFIN MINING go up and down completely randomly.

Pair Corralation between MagnaChip Semiconductor and GRIFFIN MINING

Assuming the 90 days trading horizon MagnaChip Semiconductor Corp is expected to under-perform the GRIFFIN MINING. But the stock apears to be less risky and, when comparing its historical volatility, MagnaChip Semiconductor Corp is 2.02 times less risky than GRIFFIN MINING. The stock trades about -0.04 of its potential returns per unit of risk. The GRIFFIN MINING LTD is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  171.00  in GRIFFIN MINING LTD on October 25, 2024 and sell it today you would earn a total of  1.00  from holding GRIFFIN MINING LTD or generate 0.58% return on investment over 90 days.

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

MagnaChip Semiconductor Corp  vs.  GRIFFIN MINING LTD

MagnaChip Semiconductor

Risk-Adjusted Performance

0 of 100

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 fragile 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.

GRIFFIN MINING LTD

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with MagnaChip Semiconductor and GRIFFIN MINING

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

The idea behind MagnaChip Semiconductor Corp and GRIFFIN MINING LTD 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 Commodity Directory module to find actively traded commodities issued by global exchanges.