Correlation Between MGIC INVESTMENT and ALLIANZ SE
Can any of the company-specific risk be diversified away by investing in both MGIC INVESTMENT and ALLIANZ SE 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 ALLIANZ SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC INVESTMENT and ALLIANZ SE UNSPADR, you can compare the effects of market volatilities on MGIC INVESTMENT and ALLIANZ SE 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 ALLIANZ SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC INVESTMENT and ALLIANZ SE.
Diversification Opportunities for MGIC INVESTMENT and ALLIANZ SE
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MGIC and ALLIANZ is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding MGIC INVESTMENT and ALLIANZ SE UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLIANZ SE UNSPADR 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 ALLIANZ SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALLIANZ SE UNSPADR has no effect on the direction of MGIC INVESTMENT i.e., MGIC INVESTMENT and ALLIANZ SE go up and down completely randomly.
Pair Corralation between MGIC INVESTMENT and ALLIANZ SE
Assuming the 90 days trading horizon MGIC INVESTMENT is expected to generate 0.7 times more return on investment than ALLIANZ SE. However, MGIC INVESTMENT is 1.42 times less risky than ALLIANZ SE. It trades about 0.13 of its potential returns per unit of risk. ALLIANZ SE UNSPADR is currently generating about 0.06 per unit of risk. If you would invest 1,185 in MGIC INVESTMENT on September 4, 2024 and sell it today you would earn a total of 1,295 from holding MGIC INVESTMENT or generate 109.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
MGIC INVESTMENT vs. ALLIANZ SE UNSPADR
Performance |
| Timeline |
| MGIC INVESTMENT |
| ALLIANZ SE UNSPADR |
MGIC INVESTMENT and ALLIANZ SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC INVESTMENT and ALLIANZ SE
The main advantage of trading using opposite MGIC INVESTMENT and ALLIANZ SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC INVESTMENT position performs unexpectedly, ALLIANZ SE 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 ALLIANZ SE will offset losses from the drop in ALLIANZ SE's long position.| MGIC INVESTMENT vs. TOTAL GABON | MGIC INVESTMENT vs. Walgreens Boots Alliance | MGIC INVESTMENT vs. Peak Resources Limited |
| ALLIANZ SE vs. Summit Materials | ALLIANZ SE vs. Vulcan Materials | ALLIANZ SE vs. STORE ELECTRONIC | ALLIANZ SE vs. Materialise NV |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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