Correlation Between MGIC INVESTMENT and Citic Telecom
Can any of the company-specific risk be diversified away by investing in both MGIC INVESTMENT and Citic Telecom 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 Citic Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC INVESTMENT and Citic Telecom International, you can compare the effects of market volatilities on MGIC INVESTMENT and Citic Telecom 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 Citic Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC INVESTMENT and Citic Telecom.
Diversification Opportunities for MGIC INVESTMENT and Citic Telecom
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MGIC and Citic is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding MGIC INVESTMENT and Citic Telecom International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citic Telecom Intern 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 Citic Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citic Telecom Intern has no effect on the direction of MGIC INVESTMENT i.e., MGIC INVESTMENT and Citic Telecom go up and down completely randomly.
Pair Corralation between MGIC INVESTMENT and Citic Telecom
Assuming the 90 days trading horizon MGIC INVESTMENT is expected to generate 0.79 times more return on investment than Citic Telecom. However, MGIC INVESTMENT is 1.26 times less risky than Citic Telecom. It trades about 0.19 of its potential returns per unit of risk. Citic Telecom International is currently generating about 0.01 per unit of risk. If you would invest 2,307 in MGIC INVESTMENT on September 2, 2024 and sell it today you would earn a total of 173.00 from holding MGIC INVESTMENT or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGIC INVESTMENT vs. Citic Telecom International
Performance |
| Timeline |
| MGIC INVESTMENT |
| Citic Telecom Intern |
MGIC INVESTMENT and Citic Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC INVESTMENT and Citic Telecom
The main advantage of trading using opposite MGIC INVESTMENT and Citic Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC INVESTMENT position performs unexpectedly, Citic Telecom 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 Citic Telecom will offset losses from the drop in Citic Telecom's long position.| MGIC INVESTMENT vs. SIVERS SEMICONDUCTORS AB | MGIC INVESTMENT vs. Darden Restaurants | MGIC INVESTMENT vs. Reliance Steel Aluminum | MGIC INVESTMENT vs. Q2M Managementberatung AG |
| Citic Telecom vs. X Fab Silicon | Citic Telecom vs. Silicon Motion Technology | Citic Telecom vs. MACOM Technology Solutions | Citic Telecom vs. Micron Technology |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |