Correlation Between MagnaChip Semiconductor and Cps Technologies

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

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

Diversification Opportunities for MagnaChip Semiconductor and Cps Technologies

0.55

Correlation Coefficient

MagnaChip Semiconductor  Cps Technologies

Very weak diversification

The 3 months correlation between MagnaChip and Cps is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor and Cps Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cps Technologies 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 Cps Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cps Technologies has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and Cps Technologies go up and down completely randomly.

Pair Corralation between MagnaChip Semiconductor and Cps Technologies

Allowing for the 90-day total investment horizon MagnaChip Semiconductor is expected to generate 10.39 times less return on investment than Cps Technologies. But when comparing it to its historical volatility, MagnaChip Semiconductor is 1.07 times less risky than Cps Technologies. It trades about 0.02 of its potential returns per unit of risk. Cps Technologies is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  172.00  in Cps Technologies on May 5, 2025 and sell it today you would earn a total of  118.00  from holding Cps Technologies or generate 68.6% return on investment over 90 days.

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

MagnaChip Semiconductor  vs.  Cps Technologies

MagnaChip Semiconductor

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MagnaChip Semiconductor are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, MagnaChip Semiconductor is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Cps Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cps Technologies are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Cps Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MagnaChip Semiconductor and Cps Technologies

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

The idea behind MagnaChip Semiconductor and Cps 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.