Correlation Between MagnaChip Semiconductor and Genasys

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Can any of the company-specific risk be diversified away by investing in both MagnaChip Semiconductor and Genasys 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 Genasys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MagnaChip Semiconductor and Genasys, you can compare the effects of market volatilities on MagnaChip Semiconductor and Genasys 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 Genasys. Check out your portfolio center. Please also check ongoing floating volatility patterns of MagnaChip Semiconductor and Genasys.

Diversification Opportunities for MagnaChip Semiconductor and Genasys

0.24
  Correlation Coefficient

Modest diversification

The 3 months correlation between MagnaChip and Genasys is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding MagnaChip Semiconductor and Genasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genasys 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 Genasys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genasys has no effect on the direction of MagnaChip Semiconductor i.e., MagnaChip Semiconductor and Genasys go up and down completely randomly.

Pair Corralation between MagnaChip Semiconductor and Genasys

Allowing for the 90-day total investment horizon MagnaChip Semiconductor is expected to under-perform the Genasys. But the stock apears to be less risky and, when comparing its historical volatility, MagnaChip Semiconductor is 1.09 times less risky than Genasys. The stock trades about -0.01 of its potential returns per unit of risk. The Genasys is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  220.00  in Genasys on September 12, 2025 and sell it today you would lose (5.00) from holding Genasys or give up 2.27% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

MagnaChip Semiconductor  vs.  Genasys

 Performance 
       Timeline  
MagnaChip Semiconductor 

Risk-Adjusted Performance

Weakest

 
Weak
 
Strong
Over the last 90 days MagnaChip Semiconductor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, MagnaChip Semiconductor is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.
Genasys 

Risk-Adjusted Performance

Weakest

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

MagnaChip Semiconductor and Genasys Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with MagnaChip Semiconductor and Genasys

The main advantage of trading using opposite MagnaChip Semiconductor and Genasys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MagnaChip Semiconductor position performs unexpectedly, Genasys 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 Genasys will offset losses from the drop in Genasys' long position.
The idea behind MagnaChip Semiconductor and Genasys 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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