Correlation Between Sportsmans Warehouse and MGIC INVESTMENT
Can any of the company-specific risk be diversified away by investing in both Sportsmans Warehouse 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 Sportsmans Warehouse and MGIC INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sportsmans Warehouse Holdings and MGIC INVESTMENT, you can compare the effects of market volatilities on Sportsmans Warehouse 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 Sportsmans Warehouse with a short position of MGIC INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sportsmans Warehouse and MGIC INVESTMENT.
Diversification Opportunities for Sportsmans Warehouse and MGIC INVESTMENT
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sportsmans and MGIC is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sportsmans Warehouse Holdings and MGIC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGIC INVESTMENT and Sportsmans Warehouse 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 Sportsmans Warehouse Holdings 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 Sportsmans Warehouse i.e., Sportsmans Warehouse and MGIC INVESTMENT go up and down completely randomly.
Pair Corralation between Sportsmans Warehouse and MGIC INVESTMENT
Assuming the 90 days horizon Sportsmans Warehouse Holdings is expected to under-perform the MGIC INVESTMENT. In addition to that, Sportsmans Warehouse is 3.68 times more volatile than MGIC INVESTMENT. It trades about -0.03 of its total potential returns per unit of risk. MGIC INVESTMENT is currently generating about 0.12 per unit of volatility. If you would invest 1,157 in MGIC INVESTMENT on September 14, 2024 and sell it today you would earn a total of 1,183 from holding MGIC INVESTMENT or generate 102.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sportsmans Warehouse Holdings vs. MGIC INVESTMENT
Performance |
| Timeline |
| Sportsmans Warehouse |
| MGIC INVESTMENT |
Sportsmans Warehouse and MGIC INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sportsmans Warehouse and MGIC INVESTMENT
The main advantage of trading using opposite Sportsmans Warehouse and MGIC INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sportsmans Warehouse 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.| Sportsmans Warehouse vs. Superior Plus Corp | Sportsmans Warehouse vs. SIVERS SEMICONDUCTORS AB | Sportsmans Warehouse vs. Norsk Hydro ASA | Sportsmans Warehouse vs. Reliance Steel Aluminum |
| MGIC INVESTMENT vs. Apple Inc | MGIC INVESTMENT vs. Apple Inc | MGIC INVESTMENT vs. Apple Inc | MGIC INVESTMENT vs. Apple Inc |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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