Correlation Between Magnachip Semiconductor and AFFLUENT MEDICAL

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

By analyzing existing cross correlation between Magnachip Semiconductor and AFFLUENT MEDICAL SAS, you can compare the effects of market volatilities on Magnachip Semiconductor and AFFLUENT MEDICAL 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 AFFLUENT MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnachip Semiconductor and AFFLUENT MEDICAL.

Diversification Opportunities for Magnachip Semiconductor and AFFLUENT MEDICAL

0.52

Correlation Coefficient

Magnachip Semiconductor  AFFLUENT MEDICAL

Very weak diversification

The 3 months correlation between Magnachip and AFFLUENT is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Magnachip Semiconductor and AFFLUENT MEDICAL SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFFLUENT MEDICAL SAS 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 AFFLUENT MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFFLUENT MEDICAL SAS has no effect on the direction of Magnachip Semiconductor i.e., Magnachip Semiconductor and AFFLUENT MEDICAL go up and down completely randomly.

Pair Corralation between Magnachip Semiconductor and AFFLUENT MEDICAL

Assuming the 90 days horizon Magnachip Semiconductor is expected to under-perform the AFFLUENT MEDICAL. In addition to that, Magnachip Semiconductor is 1.41 times more volatile than AFFLUENT MEDICAL SAS. It trades about -0.01 of its total potential returns per unit of risk. AFFLUENT MEDICAL SAS is currently generating about 0.01 per unit of volatility. If you would invest  138.00  in AFFLUENT MEDICAL SAS on April 7, 2025 and sell it today you would lose (2.00) from holding AFFLUENT MEDICAL SAS or give up 1.45% of portfolio value over 90 days.

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

Magnachip Semiconductor  vs.  AFFLUENT MEDICAL SAS

Magnachip Semiconductor

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Magnachip Semiconductor are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Magnachip Semiconductor reported solid returns over the last few months and may actually be approaching a breakup point.

AFFLUENT MEDICAL SAS

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AFFLUENT MEDICAL SAS are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, AFFLUENT MEDICAL may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Magnachip Semiconductor and AFFLUENT MEDICAL

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

The idea behind Magnachip Semiconductor and AFFLUENT MEDICAL SAS 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.