Correlation Between Gaztransport Technigaz and MGIC INVESTMENT
Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz 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 Gaztransport Technigaz and MGIC INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaztransport Technigaz SA and MGIC INVESTMENT, you can compare the effects of market volatilities on Gaztransport Technigaz 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 Gaztransport Technigaz with a short position of MGIC INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and MGIC INVESTMENT.
Diversification Opportunities for Gaztransport Technigaz and MGIC INVESTMENT
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gaztransport and MGIC is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and MGIC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGIC INVESTMENT and Gaztransport Technigaz 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 Gaztransport Technigaz SA 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 Gaztransport Technigaz i.e., Gaztransport Technigaz and MGIC INVESTMENT go up and down completely randomly.
Pair Corralation between Gaztransport Technigaz and MGIC INVESTMENT
Assuming the 90 days horizon Gaztransport Technigaz is expected to generate 1.11 times less return on investment than MGIC INVESTMENT. But when comparing it to its historical volatility, Gaztransport Technigaz SA is 1.03 times less risky than MGIC INVESTMENT. It trades about 0.13 of its potential returns per unit of risk. MGIC INVESTMENT is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,287 in MGIC INVESTMENT on September 3, 2024 and sell it today you would earn a total of 193.00 from holding MGIC INVESTMENT or generate 8.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport Technigaz SA vs. MGIC INVESTMENT
Performance |
| Timeline |
| Gaztransport Technigaz |
| MGIC INVESTMENT |
Gaztransport Technigaz and MGIC INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport Technigaz and MGIC INVESTMENT
The main advantage of trading using opposite Gaztransport Technigaz and MGIC INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz 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.| Gaztransport Technigaz vs. NISSAN CHEMICAL IND | Gaztransport Technigaz vs. Siamgas And Petrochemicals | Gaztransport Technigaz vs. STMicroelectronics NV | Gaztransport Technigaz vs. LPKF Laser Electronics |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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