Correlation Between Electro Scientific and MagnaChip Semiconductor
Can any of the company-specific risk be diversified away by investing in both Electro Scientific and MagnaChip Semiconductor 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 Electro Scientific and MagnaChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electro Scientific Industries and MagnaChip Semiconductor, you can compare the effects of market volatilities on Electro Scientific and MagnaChip Semiconductor 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 Electro Scientific with a short position of MagnaChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electro Scientific and MagnaChip Semiconductor.
Diversification Opportunities for Electro Scientific and MagnaChip Semiconductor
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Electro and MagnaChip is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Electro Scientific Industries and MagnaChip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MagnaChip Semiconductor and Electro Scientific 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 Electro Scientific Industries are associated (or correlated) with MagnaChip Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MagnaChip Semiconductor has no effect on the direction of Electro Scientific i.e., Electro Scientific and MagnaChip Semiconductor go up and down completely randomly.
Pair Corralation between Electro Scientific and MagnaChip Semiconductor
If you would invest (100.00) in Electro Scientific Industries on January 20, 2024 and sell it today you would earn a total of 100.00 from holding Electro Scientific Industries or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Electro Scientific Industries vs. MagnaChip Semiconductor
Performance |
| Timeline |
| Electro Scientific |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| MagnaChip Semiconductor |
Electro Scientific and MagnaChip Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electro Scientific and MagnaChip Semiconductor
The main advantage of trading using opposite Electro Scientific and MagnaChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electro Scientific position performs unexpectedly, MagnaChip Semiconductor 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 MagnaChip Semiconductor will offset losses from the drop in MagnaChip Semiconductor's long position.| Electro Scientific vs. Entegris | Electro Scientific vs. Sun Country Airlines | Electro Scientific vs. Copa Holdings SA | Electro Scientific vs. Analog Devices |
| MagnaChip Semiconductor vs. CEVA Inc | MagnaChip Semiconductor vs. MACOM Technology Solutions | MagnaChip Semiconductor vs. FormFactor | MagnaChip Semiconductor vs. MaxLinear |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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