Correlation Between Gaming and MGIC INVESTMENT
Can any of the company-specific risk be diversified away by investing in both Gaming 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 Gaming and MGIC INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaming and Leisure and MGIC INVESTMENT, you can compare the effects of market volatilities on Gaming 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 Gaming with a short position of MGIC INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaming and MGIC INVESTMENT.
Diversification Opportunities for Gaming and MGIC INVESTMENT
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gaming and MGIC is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Gaming and Leisure and MGIC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGIC INVESTMENT and Gaming 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 Gaming and Leisure 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 Gaming i.e., Gaming and MGIC INVESTMENT go up and down completely randomly.
Pair Corralation between Gaming and MGIC INVESTMENT
Assuming the 90 days horizon Gaming and Leisure is expected to generate 0.96 times more return on investment than MGIC INVESTMENT. However, Gaming and Leisure is 1.04 times less risky than MGIC INVESTMENT. It trades about 0.05 of its potential returns per unit of risk. MGIC INVESTMENT is currently generating about 0.04 per unit of risk. If you would invest 4,393 in Gaming and Leisure on October 26, 2024 and sell it today you would earn a total of 309.00 from holding Gaming and Leisure or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaming and Leisure vs. MGIC INVESTMENT
Performance |
| Timeline |
| Gaming and Leisure |
| MGIC INVESTMENT |
Gaming and MGIC INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaming and MGIC INVESTMENT
The main advantage of trading using opposite Gaming and MGIC INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaming 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.| Gaming vs. Performance Food Group | Gaming vs. GREENX METALS LTD | Gaming vs. Zijin Mining Group | Gaming vs. TreeHouse Foods |
| MGIC INVESTMENT vs. Gaming and Leisure | MGIC INVESTMENT vs. TERADATA | MGIC INVESTMENT vs. Pure Storage | MGIC INVESTMENT vs. Cass Information Systems |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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