Correlation Between MagnaChip Semiconductor and FTC Solar
Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and FTC Solar 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 FTC Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MagnaChip Semiconductor and FTC Solar, you can compare the effects of market volatilities on MagnaChip Semiconductor and FTC Solar 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 FTC Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and FTC Solar.
Diversification Opportunities for MagnaChip Semiconductor and FTC Solar
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MagnaChip and FTC is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor and FTC Solar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTC Solar 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 FTC Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTC Solar has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and FTC Solar go up and down completely randomly.
Pair Corralation between MagnaChip Semiconductor and FTC Solar
Allowing for the 90-day total investment horizon MagnaChip Semiconductor is expected to under-perform the FTC Solar. But the stock apears to be less risky and, when comparing its historical volatility, MagnaChip Semiconductor is 2.85 times less risky than FTC Solar. The stock trades about -0.05 of its potential returns per unit of risk. The FTC Solar is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,460 in FTC Solar on June 10, 2025 and sell it today you would lose (824.00) from holding FTC Solar or give up 56.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MagnaChip Semiconductor vs. FTC Solar
Performance |
| Timeline |
| MagnaChip Semiconductor |
| FTC Solar |
MagnaChip Semiconductor and FTC Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MagnaChip Semiconductor and FTC Solar
The main advantage of trading using opposite MagnaChip Semiconductor and FTC Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, FTC Solar 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 FTC Solar will offset losses from the drop in FTC Solar's long position.| MagnaChip Semiconductor vs. nLIGHT Inc | MagnaChip Semiconductor vs. CEVA Inc | MagnaChip Semiconductor vs. Alpha and Omega | MagnaChip Semiconductor vs. MaxLinear |
| FTC Solar vs. Maxeon Solar Technologies | FTC Solar vs. Nextracker Class A | FTC Solar vs. Shoals Technologies Group | FTC Solar vs. Array Technologies |
Check out your portfolio center.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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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