Correlation Between Greencity Acquisition and MagnaChip Semiconductor

Can any of the company-specific risk be diversified away by investing in both Greencity Acquisition 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 Greencity Acquisition and MagnaChip Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Greencity Acquisition Corp and MagnaChip Semiconductor, you can compare the effects of market volatilities on Greencity Acquisition 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 Greencity Acquisition with a short position of MagnaChip Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greencity Acquisition and MagnaChip Semiconductor.

Diversification Opportunities for Greencity Acquisition and MagnaChip Semiconductor

-0.38

Correlation Coefficient

Greencity Acquisition  MagnaChip Semiconductor

Very good diversification

The 3 months correlation between Greencity and MagnaChip is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Greencity Acquisition Corp and MagnaChip Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MagnaChip Semiconductor and Greencity Acquisition 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 Greencity Acquisition Corp 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 Greencity Acquisition i.e., Greencity Acquisition and MagnaChip Semiconductor go up and down completely randomly.

Pair Corralation between Greencity Acquisition and MagnaChip Semiconductor

If you would invest  1,146  in Greencity Acquisition Corp on September 17, 2024 and sell it today you would earn a total of  0.00  from holding Greencity Acquisition Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Greencity Acquisition Corp  vs.  MagnaChip Semiconductor

Greencity Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greencity Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Greencity Acquisition is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

MagnaChip Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MagnaChip Semiconductor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Greencity Acquisition and MagnaChip Semiconductor

The main advantage of trading using opposite Greencity Acquisition and MagnaChip Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greencity Acquisition 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.

The idea behind Greencity Acquisition Corp and MagnaChip Semiconductor 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.