Correlation Between Japan Asia and MGIC INVESTMENT
Can any of the company-specific risk be diversified away by investing in both Japan Asia 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 Japan Asia and MGIC INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Asia Investment and MGIC INVESTMENT, you can compare the effects of market volatilities on Japan Asia 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 Japan Asia with a short position of MGIC INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Asia and MGIC INVESTMENT.
Diversification Opportunities for Japan Asia and MGIC INVESTMENT
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Japan and MGIC is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Japan Asia Investment and MGIC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGIC INVESTMENT and Japan Asia 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 Japan Asia Investment 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 Japan Asia i.e., Japan Asia and MGIC INVESTMENT go up and down completely randomly.
Pair Corralation between Japan Asia and MGIC INVESTMENT
Assuming the 90 days horizon Japan Asia Investment is expected to under-perform the MGIC INVESTMENT. In addition to that, Japan Asia is 2.81 times more volatile than MGIC INVESTMENT. It trades about -0.02 of its total potential returns per unit of risk. MGIC INVESTMENT is currently generating about 0.11 per unit of volatility. If you would invest 1,767 in MGIC INVESTMENT on November 3, 2024 and sell it today you would earn a total of 713.00 from holding MGIC INVESTMENT or generate 40.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Asia Investment vs. MGIC INVESTMENT
Performance |
| Timeline |
| Japan Asia Investment |
| MGIC INVESTMENT |
Japan Asia and MGIC INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Asia and MGIC INVESTMENT
The main advantage of trading using opposite Japan Asia and MGIC INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Asia 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.| Japan Asia vs. CLOVER HEALTH INV | Japan Asia vs. De Grey Mining | Japan Asia vs. Jacquet Metal Service | Japan Asia vs. Calibre Mining Corp |
| MGIC INVESTMENT vs. STMICROELECTRONICS | MGIC INVESTMENT vs. Japan Tobacco | MGIC INVESTMENT vs. PEPTONIC MEDICAL | MGIC INVESTMENT vs. MeVis Medical Solutions |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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