Correlation Between SANOK RUBBER and MGIC INVESTMENT
Can any of the company-specific risk be diversified away by investing in both SANOK RUBBER and MGIC INVESTMENT 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 SANOK RUBBER and MGIC INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SANOK RUBBER ZY and MGIC INVESTMENT, you can compare the effects of market volatilities on SANOK RUBBER and MGIC INVESTMENT 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 SANOK RUBBER with a short position of MGIC INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANOK RUBBER and MGIC INVESTMENT.
Diversification Opportunities for SANOK RUBBER and MGIC INVESTMENT
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SANOK and MGIC is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding SANOK RUBBER ZY and MGIC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGIC INVESTMENT and SANOK RUBBER 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 SANOK RUBBER ZY are associated (or correlated) with MGIC INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGIC INVESTMENT has no effect on the direction of SANOK RUBBER i.e., SANOK RUBBER and MGIC INVESTMENT go up and down completely randomly.
Pair Corralation between SANOK RUBBER and MGIC INVESTMENT
Assuming the 90 days horizon SANOK RUBBER ZY is expected to generate 2.51 times more return on investment than MGIC INVESTMENT. However, SANOK RUBBER is 2.51 times more volatile than MGIC INVESTMENT. It trades about 0.09 of its potential returns per unit of risk. MGIC INVESTMENT is currently generating about 0.17 per unit of risk. If you would invest 335.00 in SANOK RUBBER ZY on September 3, 2024 and sell it today you would earn a total of 110.00 from holding SANOK RUBBER ZY or generate 32.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SANOK RUBBER ZY vs. MGIC INVESTMENT
Performance |
| Timeline |
| SANOK RUBBER ZY |
| MGIC INVESTMENT |
SANOK RUBBER and MGIC INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SANOK RUBBER and MGIC INVESTMENT
The main advantage of trading using opposite SANOK RUBBER and MGIC INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANOK RUBBER position performs unexpectedly, MGIC INVESTMENT 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 MGIC INVESTMENT will offset losses from the drop in MGIC INVESTMENT's long position.| SANOK RUBBER vs. Cal Maine Foods | SANOK RUBBER vs. G III Apparel Group | SANOK RUBBER vs. Meli Hotels International | SANOK RUBBER vs. INTERCONT HOTELS |
| MGIC INVESTMENT vs. TOTAL GABON | MGIC INVESTMENT vs. Walgreens Boots Alliance | MGIC INVESTMENT vs. Peak Resources Limited |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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