Correlation Between ALLIANZ SE and MGIC INVESTMENT
Can any of the company-specific risk be diversified away by investing in both ALLIANZ SE 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 ALLIANZ SE and MGIC INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALLIANZ SE UNSPADR and MGIC INVESTMENT, you can compare the effects of market volatilities on ALLIANZ SE 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 ALLIANZ SE with a short position of MGIC INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALLIANZ SE and MGIC INVESTMENT.
Diversification Opportunities for ALLIANZ SE and MGIC INVESTMENT
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ALLIANZ and MGIC is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding ALLIANZ SE UNSPADR and MGIC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGIC INVESTMENT and ALLIANZ SE 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 ALLIANZ SE UNSPADR 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 ALLIANZ SE i.e., ALLIANZ SE and MGIC INVESTMENT go up and down completely randomly.
Pair Corralation between ALLIANZ SE and MGIC INVESTMENT
Assuming the 90 days trading horizon ALLIANZ SE is expected to generate 1.0 times less return on investment than MGIC INVESTMENT. In addition to that, ALLIANZ SE is 1.23 times more volatile than MGIC INVESTMENT. It trades about 0.06 of its total potential returns per unit of risk. MGIC INVESTMENT is currently generating about 0.07 per unit of volatility. If you would invest 2,207 in MGIC INVESTMENT on September 12, 2024 and sell it today you would earn a total of 133.00 from holding MGIC INVESTMENT or generate 6.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALLIANZ SE UNSPADR vs. MGIC INVESTMENT
Performance |
| Timeline |
| ALLIANZ SE UNSPADR |
| MGIC INVESTMENT |
ALLIANZ SE and MGIC INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALLIANZ SE and MGIC INVESTMENT
The main advantage of trading using opposite ALLIANZ SE and MGIC INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALLIANZ SE 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.| ALLIANZ SE vs. Superior Plus Corp | ALLIANZ SE vs. SIVERS SEMICONDUCTORS AB | ALLIANZ SE vs. CHINA HUARONG ENERHD 50 | ALLIANZ SE vs. NORDIC HALIBUT AS |
| MGIC INVESTMENT vs. Apple Inc | MGIC INVESTMENT vs. Apple Inc | MGIC INVESTMENT vs. Apple Inc | MGIC INVESTMENT vs. Apple Inc |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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