Correlation Between MagnaChip Semiconductor and One Valley

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

By analyzing existing cross correlation between MagnaChip Semiconductor and One Valley Bancorp, you can compare the effects of market volatilities on MagnaChip Semiconductor and One Valley 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 One Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and One Valley.

Diversification Opportunities for MagnaChip Semiconductor and One Valley

0.0

Correlation Coefficient

MagnaChip Semiconductor  One Valley

Pay attention - limited upside

The 3 months correlation between MagnaChip and One is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor and One Valley Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Valley Bancorp 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 One Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Valley Bancorp has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and One Valley go up and down completely randomly.

Pair Corralation between MagnaChip Semiconductor and One Valley

If you would invest (100.00) in One Valley Bancorp on September 20, 2024 and sell it today you would earn a total of  100.00  from holding One Valley Bancorp 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

MagnaChip Semiconductor  vs.  One Valley Bancorp

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 weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

One Valley Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days One Valley Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, One Valley is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with MagnaChip Semiconductor and One Valley

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

The idea behind MagnaChip Semiconductor and One Valley Bancorp 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.