Correlation Between MGIC INVESTMENT and FRASERS PROPERTY
Can any of the company-specific risk be diversified away by investing in both MGIC INVESTMENT and FRASERS PROPERTY 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 MGIC INVESTMENT and FRASERS PROPERTY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC INVESTMENT and FRASERS PROPERTY, you can compare the effects of market volatilities on MGIC INVESTMENT and FRASERS PROPERTY 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 MGIC INVESTMENT with a short position of FRASERS PROPERTY. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC INVESTMENT and FRASERS PROPERTY.
Diversification Opportunities for MGIC INVESTMENT and FRASERS PROPERTY
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MGIC and FRASERS is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding MGIC INVESTMENT and FRASERS PROPERTY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FRASERS PROPERTY and MGIC INVESTMENT 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 MGIC INVESTMENT are associated (or correlated) with FRASERS PROPERTY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FRASERS PROPERTY has no effect on the direction of MGIC INVESTMENT i.e., MGIC INVESTMENT and FRASERS PROPERTY go up and down completely randomly.
Pair Corralation between MGIC INVESTMENT and FRASERS PROPERTY
Assuming the 90 days trading horizon MGIC INVESTMENT is expected to generate 1.1 times less return on investment than FRASERS PROPERTY. But when comparing it to its historical volatility, MGIC INVESTMENT is 1.41 times less risky than FRASERS PROPERTY. It trades about 0.12 of its potential returns per unit of risk. FRASERS PROPERTY is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 53.00 in FRASERS PROPERTY on September 19, 2024 and sell it today you would earn a total of 11.00 from holding FRASERS PROPERTY or generate 20.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
MGIC INVESTMENT vs. FRASERS PROPERTY
Performance |
| Timeline |
| MGIC INVESTMENT |
| FRASERS PROPERTY |
MGIC INVESTMENT and FRASERS PROPERTY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC INVESTMENT and FRASERS PROPERTY
The main advantage of trading using opposite MGIC INVESTMENT and FRASERS PROPERTY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC INVESTMENT position performs unexpectedly, FRASERS PROPERTY 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 FRASERS PROPERTY will offset losses from the drop in FRASERS PROPERTY's long position.| MGIC INVESTMENT vs. 24SEVENOFFICE GROUP AB | MGIC INVESTMENT vs. CeoTronics AG | MGIC INVESTMENT vs. Perdoceo Education | MGIC INVESTMENT vs. Brockhaus Capital Management |
| FRASERS PROPERTY vs. Strategic Investments AS | FRASERS PROPERTY vs. Chuangs China Investments | FRASERS PROPERTY vs. REGAL ASIAN INVESTMENTS | FRASERS PROPERTY vs. Columbia Sportswear |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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