Correlation Between DAX Index and MGIC Investment
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By analyzing existing cross correlation between DAX Index and MGIC Investment, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of MGIC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and MGIC Investment.
Diversification Opportunities for DAX Index and MGIC Investment
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DAX and MGIC is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and MGIC Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGIC Investment and DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and MGIC Investment go up and down completely randomly.
Pair Corralation between DAX Index and MGIC Investment
Assuming the 90 days trading horizon DAX Index is expected to generate 1.69 times less return on investment than MGIC Investment. But when comparing it to its historical volatility, DAX Index is 1.92 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 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,562 in MGIC Investment on September 14, 2024 and sell it today you would earn a total of 778.00 from holding MGIC Investment or generate 49.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 99.64% |
Values | Daily Returns |
DAX Index vs. MGIC Investment
Performance |
Timeline |
DAX Index and MGIC Investment Volatility Contrast
Predicted Return Density |
Returns |
DAX Index
Pair trading matchups for DAX Index
MGIC Investment
Pair trading matchups for MGIC Investment
Pair Trading with DAX Index and MGIC Investment
The main advantage of trading using opposite DAX Index and MGIC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.DAX Index vs. CARSALESCOM | DAX Index vs. Sumitomo Mitsui Construction | DAX Index vs. H FARM SPA | DAX Index vs. Nufarm Limited |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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