Correlation Between MGIC INVESTMENT and AAC TECHNOLOGHLDGADR
Can any of the company-specific risk be diversified away by investing in both MGIC INVESTMENT and AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC INVESTMENT and AAC TECHNOLOGHLDGADR, you can compare the effects of market volatilities on MGIC INVESTMENT and AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC INVESTMENT and AAC TECHNOLOGHLDGADR.
Diversification Opportunities for MGIC INVESTMENT and AAC TECHNOLOGHLDGADR
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MGIC and AAC is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding MGIC INVESTMENT and AAC TECHNOLOGHLDGADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAC TECHNOLOGHLDGADR has no effect on the direction of MGIC INVESTMENT i.e., MGIC INVESTMENT and AAC TECHNOLOGHLDGADR go up and down completely randomly.
Pair Corralation between MGIC INVESTMENT and AAC TECHNOLOGHLDGADR
Assuming the 90 days trading horizon MGIC INVESTMENT is expected to generate 1.69 times less return on investment than AAC TECHNOLOGHLDGADR. But when comparing it to its historical volatility, MGIC INVESTMENT is 2.62 times less risky than AAC TECHNOLOGHLDGADR. It trades about 0.18 of its potential returns per unit of risk. AAC TECHNOLOGHLDGADR is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 362.00 in AAC TECHNOLOGHLDGADR on August 29, 2024 and sell it today you would earn a total of 62.00 from holding AAC TECHNOLOGHLDGADR or generate 17.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGIC INVESTMENT vs. AAC TECHNOLOGHLDGADR
Performance |
| Timeline |
| MGIC INVESTMENT |
| AAC TECHNOLOGHLDGADR |
MGIC INVESTMENT and AAC TECHNOLOGHLDGADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC INVESTMENT and AAC TECHNOLOGHLDGADR
The main advantage of trading using opposite MGIC INVESTMENT and AAC TECHNOLOGHLDGADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC INVESTMENT position performs unexpectedly, AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR will offset losses from the drop in AAC TECHNOLOGHLDGADR's long position.| MGIC INVESTMENT vs. Apple Inc | MGIC INVESTMENT vs. Apple Inc | MGIC INVESTMENT vs. Superior Plus Corp | MGIC INVESTMENT vs. SIVERS SEMICONDUCTORS AB |
| AAC TECHNOLOGHLDGADR vs. Cisco Systems | AAC TECHNOLOGHLDGADR vs. Superior Plus Corp | AAC TECHNOLOGHLDGADR vs. SIVERS SEMICONDUCTORS AB | AAC TECHNOLOGHLDGADR vs. Talanx AG |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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