Correlation Between MGIC INVESTMENT and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both MGIC INVESTMENT and Zurich Insurance 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 Zurich Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC INVESTMENT and Zurich Insurance Group, you can compare the effects of market volatilities on MGIC INVESTMENT and Zurich Insurance 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 Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC INVESTMENT and Zurich Insurance.
Diversification Opportunities for MGIC INVESTMENT and Zurich Insurance
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MGIC and Zurich is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding MGIC INVESTMENT and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance 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 Zurich Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zurich Insurance has no effect on the direction of MGIC INVESTMENT i.e., MGIC INVESTMENT and Zurich Insurance go up and down completely randomly.
Pair Corralation between MGIC INVESTMENT and Zurich Insurance
Assuming the 90 days trading horizon MGIC INVESTMENT is expected to generate 0.48 times more return on investment than Zurich Insurance. However, MGIC INVESTMENT is 2.08 times less risky than Zurich Insurance. It trades about 0.21 of its potential returns per unit of risk. Zurich Insurance Group is currently generating about 0.01 per unit of risk. If you would invest 2,280 in MGIC INVESTMENT on October 29, 2024 and sell it today you would earn a total of 80.00 from holding MGIC INVESTMENT or generate 3.51% 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. Zurich Insurance Group
Performance |
| Timeline |
| MGIC INVESTMENT |
| Zurich Insurance |
MGIC INVESTMENT and Zurich Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC INVESTMENT and Zurich Insurance
The main advantage of trading using opposite MGIC INVESTMENT and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC INVESTMENT position performs unexpectedly, Zurich Insurance 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 Zurich Insurance will offset losses from the drop in Zurich Insurance's long position.| MGIC INVESTMENT vs. Synovus Financial Corp | MGIC INVESTMENT vs. MAGNUM MINING EXP | MGIC INVESTMENT vs. SUN LIFE FINANCIAL | MGIC INVESTMENT vs. MAG SILVER |
| Zurich Insurance vs. Minerals Technologies | Zurich Insurance vs. Playtech plc | Zurich Insurance vs. SANOK RUBBER ZY | Zurich Insurance vs. Sumitomo Rubber Industries |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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