Correlation Between Tenaris SA and MGIC INVESTMENT
Can any of the company-specific risk be diversified away by investing in both Tenaris SA and MGIC INVESTMENT 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 Tenaris SA and MGIC INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tenaris SA and MGIC INVESTMENT, you can compare the effects of market volatilities on Tenaris SA and MGIC INVESTMENT 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 Tenaris SA with a short position of MGIC INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tenaris SA and MGIC INVESTMENT.
Diversification Opportunities for Tenaris SA and MGIC INVESTMENT
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tenaris and MGIC is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Tenaris SA and MGIC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGIC INVESTMENT and Tenaris SA 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 Tenaris SA are associated (or correlated) with MGIC INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGIC INVESTMENT has no effect on the direction of Tenaris SA i.e., Tenaris SA and MGIC INVESTMENT go up and down completely randomly.
Pair Corralation between Tenaris SA and MGIC INVESTMENT
Assuming the 90 days horizon Tenaris SA is expected to generate 1.4 times less return on investment than MGIC INVESTMENT. In addition to that, Tenaris SA is 1.52 times more volatile than MGIC INVESTMENT. It trades about 0.07 of its total potential returns per unit of risk. MGIC INVESTMENT is currently generating about 0.15 per unit of volatility. If you would invest 1,271 in MGIC INVESTMENT on August 29, 2024 and sell it today you would earn a total of 1,229 from holding MGIC INVESTMENT or generate 96.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tenaris SA vs. MGIC INVESTMENT
Performance |
| Timeline |
| Tenaris SA |
| MGIC INVESTMENT |
Tenaris SA and MGIC INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tenaris SA and MGIC INVESTMENT
The main advantage of trading using opposite Tenaris SA and MGIC INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tenaris SA position performs unexpectedly, MGIC INVESTMENT 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 MGIC INVESTMENT will offset losses from the drop in MGIC INVESTMENT's long position.| Tenaris SA vs. Zijin Mining Group | Tenaris SA vs. Jacquet Metal Service | Tenaris SA vs. Harmony Gold Mining | Tenaris SA vs. GRIFFIN MINING LTD |
| MGIC INVESTMENT vs. SMA Solar Technology | MGIC INVESTMENT vs. Firan Technology Group | MGIC INVESTMENT vs. Vishay Intertechnology | MGIC INVESTMENT 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |