Correlation Between Macronix International and VIA Technologies

Can any of the company-specific risk be diversified away by investing in both Macronix International and VIA Technologies 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 Macronix International and VIA Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Macronix International Co and VIA Technologies, you can compare the effects of market volatilities on Macronix International and VIA Technologies 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 Macronix International with a short position of VIA Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macronix International and VIA Technologies.

Diversification Opportunities for Macronix International and VIA Technologies

0.91

Correlation Coefficient

Macronix International  VIA Technologies

Almost no diversification

The 3 months correlation between Macronix and VIA is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Macronix International Co and VIA Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIA Technologies and Macronix International 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 Macronix International Co are associated (or correlated) with VIA Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIA Technologies has no effect on the direction of Macronix International i.e., Macronix International and VIA Technologies go up and down completely randomly.

Pair Corralation between Macronix International and VIA Technologies

Assuming the 90 days trading horizon Macronix International Co is expected to under-perform the VIA Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Macronix International Co is 1.73 times less risky than VIA Technologies. The stock trades about -0.22 of its potential returns per unit of risk. The VIA Technologies is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  13,000  in VIA Technologies on September 2, 2024 and sell it today you would lose (2,700) from holding VIA Technologies or give up 20.77% of portfolio value over 90 days.

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

Macronix International Co  vs.  VIA Technologies

Macronix International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Macronix International Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

VIA Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VIA Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Macronix International and VIA Technologies

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

The idea behind Macronix International Co and VIA Technologies 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.