Correlation Between MagnaChip Semiconductor and Lundin Energy
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and Lundin Energy 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 Lundin Energy 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 Lundin Energy AB, you can compare the effects of market volatilities on MagnaChip Semiconductor and Lundin Energy 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 Lundin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and Lundin Energy.
Diversification Opportunities for MagnaChip Semiconductor and Lundin Energy
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MagnaChip and Lundin is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor Corp and Lundin Energy AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Energy AB 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 Lundin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Energy AB has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and Lundin Energy go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and Lundin Energy
Assuming the 90 days trading horizon MagnaChip Semiconductor Corp is expected to generate 1.04 times more return on investment than Lundin Energy. However, MagnaChip Semiconductor is 1.04 times more volatile than Lundin Energy AB. It trades about -0.06 of its potential returns per unit of risk. Lundin Energy AB is currently generating about -0.21 per unit of risk. If you would invest 392.00 in MagnaChip Semiconductor Corp on December 30, 2024 and sell it today you would lose (52.00) from holding MagnaChip Semiconductor Corp or give up 13.27% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
MagnaChip Semiconductor Corp vs. Lundin Energy AB
Performance |
Timeline |
MagnaChip Semiconductor |
Lundin Energy AB |
MagnaChip Semiconductor and Lundin Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MagnaChip Semiconductor and Lundin Energy
The main advantage of trading using opposite MagnaChip Semiconductor and Lundin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, Lundin Energy 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 Lundin Energy will offset losses from the drop in Lundin Energy's long position.MagnaChip Semiconductor vs. MAANSHAN IRON H | MagnaChip Semiconductor vs. STEEL DYNAMICS | MagnaChip Semiconductor vs. ANGANG STEEL H | MagnaChip Semiconductor vs. BlueScope Steel Limited |
Lundin Energy vs. PREMIER FOODS | Lundin Energy vs. TOREX SEMICONDUCTOR LTD | Lundin Energy vs. Semiconductor Manufacturing International | Lundin Energy vs. MagnaChip Semiconductor Corp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
CEOs Directory Screen CEOs from public companies around the world | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |