Correlation Between MGIC INVESTMENT and AMAG Austria
Can any of the company-specific risk be diversified away by investing in both MGIC INVESTMENT and AMAG Austria 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 AMAG Austria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC INVESTMENT and AMAG Austria Metall, you can compare the effects of market volatilities on MGIC INVESTMENT and AMAG Austria 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 AMAG Austria. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC INVESTMENT and AMAG Austria.
Diversification Opportunities for MGIC INVESTMENT and AMAG Austria
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MGIC and AMAG is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding MGIC INVESTMENT and AMAG Austria Metall in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMAG Austria Metall 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 AMAG Austria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMAG Austria Metall has no effect on the direction of MGIC INVESTMENT i.e., MGIC INVESTMENT and AMAG Austria go up and down completely randomly.
Pair Corralation between MGIC INVESTMENT and AMAG Austria
Assuming the 90 days trading horizon MGIC INVESTMENT is expected to generate 0.85 times more return on investment than AMAG Austria. However, MGIC INVESTMENT is 1.18 times less risky than AMAG Austria. It trades about 0.12 of its potential returns per unit of risk. AMAG Austria Metall is currently generating about -0.03 per unit of risk. If you would invest 1,157 in MGIC INVESTMENT on September 24, 2024 and sell it today you would earn a total of 1,123 from holding MGIC INVESTMENT or generate 97.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
MGIC INVESTMENT vs. AMAG Austria Metall
Performance |
| Timeline |
| MGIC INVESTMENT |
| AMAG Austria Metall |
MGIC INVESTMENT and AMAG Austria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC INVESTMENT and AMAG Austria
The main advantage of trading using opposite MGIC INVESTMENT and AMAG Austria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC INVESTMENT position performs unexpectedly, AMAG Austria 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 AMAG Austria will offset losses from the drop in AMAG Austria's long position.| MGIC INVESTMENT vs. Apple Inc | MGIC INVESTMENT vs. Apple Inc | MGIC INVESTMENT vs. Apple Inc | MGIC INVESTMENT vs. Microsoft |
| AMAG Austria vs. Norsk Hydro ASA | AMAG Austria vs. Norsk Hydro ASA | AMAG Austria vs. Alcoa Corp | AMAG Austria vs. Kaiser Aluminum |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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