Correlation Between MGIC INVESTMENT and ZANAGA IRON
Can any of the company-specific risk be diversified away by investing in both MGIC INVESTMENT and ZANAGA IRON 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 ZANAGA IRON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC INVESTMENT and ZANAGA IRON ORE, you can compare the effects of market volatilities on MGIC INVESTMENT and ZANAGA IRON 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 ZANAGA IRON. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC INVESTMENT and ZANAGA IRON.
Diversification Opportunities for MGIC INVESTMENT and ZANAGA IRON
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MGIC and ZANAGA is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding MGIC INVESTMENT and ZANAGA IRON ORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZANAGA IRON ORE 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 ZANAGA IRON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZANAGA IRON ORE has no effect on the direction of MGIC INVESTMENT i.e., MGIC INVESTMENT and ZANAGA IRON go up and down completely randomly.
Pair Corralation between MGIC INVESTMENT and ZANAGA IRON
Assuming the 90 days trading horizon MGIC INVESTMENT is expected to generate 0.15 times more return on investment than ZANAGA IRON. However, MGIC INVESTMENT is 6.57 times less risky than ZANAGA IRON. It trades about 0.14 of its potential returns per unit of risk. ZANAGA IRON ORE is currently generating about 0.0 per unit of risk. If you would invest 1,405 in MGIC INVESTMENT on August 28, 2024 and sell it today you would earn a total of 1,035 from holding MGIC INVESTMENT or generate 73.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGIC INVESTMENT vs. ZANAGA IRON ORE
Performance |
| Timeline |
| MGIC INVESTMENT |
| ZANAGA IRON ORE |
MGIC INVESTMENT and ZANAGA IRON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC INVESTMENT and ZANAGA IRON
The main advantage of trading using opposite MGIC INVESTMENT and ZANAGA IRON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC INVESTMENT position performs unexpectedly, ZANAGA IRON 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 ZANAGA IRON will offset losses from the drop in ZANAGA IRON's long position.| MGIC INVESTMENT vs. SMA Solar Technology | MGIC INVESTMENT vs. Firan Technology Group | MGIC INVESTMENT vs. Vishay Intertechnology | MGIC INVESTMENT vs. Micron Technology |
| ZANAGA IRON vs. AGF Management Limited | ZANAGA IRON vs. CPU SOFTWAREHOUSE | ZANAGA IRON vs. SHELF DRILLING LTD | ZANAGA IRON vs. AWILCO DRILLING PLC |
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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