Correlation Between MagnaChip Semiconductor and Marvell Technology
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and Marvell Technology 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 Marvell Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MagnaChip Semiconductor and Marvell Technology Group, you can compare the effects of market volatilities on MagnaChip Semiconductor and Marvell Technology 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 Marvell Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and Marvell Technology.
Diversification Opportunities for MagnaChip Semiconductor and Marvell Technology
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MagnaChip and Marvell is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor and Marvell Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marvell Technology 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 Marvell Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marvell Technology has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and Marvell Technology go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and Marvell Technology
Allowing for the 90-day total investment horizon MagnaChip Semiconductor is expected to under-perform the Marvell Technology. But the stock apears to be less risky and, when comparing its historical volatility, MagnaChip Semiconductor is 1.39 times less risky than Marvell Technology. The stock trades about -0.39 of its potential returns per unit of risk. The Marvell Technology Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 6,548 in Marvell Technology Group on January 20, 2024 and sell it today you would lose (24.00) from holding Marvell Technology Group or give up 0.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MagnaChip Semiconductor vs. Marvell Technology Group
Performance |
| Timeline |
| MagnaChip Semiconductor |
| Marvell Technology |
MagnaChip Semiconductor and Marvell Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and Marvell Technology
The main advantage of trading using opposite MagnaChip Semiconductor and Marvell Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, Marvell Technology 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 Marvell Technology will offset losses from the drop in Marvell Technology's long position.| MagnaChip Semiconductor vs. CEVA Inc | MagnaChip Semiconductor vs. MACOM Technology Solutions | MagnaChip Semiconductor vs. FormFactor | MagnaChip Semiconductor vs. MaxLinear |
| Marvell Technology vs. NVIDIA | Marvell Technology vs. Intel | Marvell Technology vs. Taiwan Semiconductor Manufacturing | Marvell Technology vs. Micron Technology |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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