Correlation Between Bright Scholar and MGIC Investment
Can any of the company-specific risk be diversified away by investing in both Bright Scholar 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 Bright Scholar and MGIC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bright Scholar Education and MGIC Investment Corp, you can compare the effects of market volatilities on Bright Scholar 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 Bright Scholar with a short position of MGIC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Scholar and MGIC Investment.
Diversification Opportunities for Bright Scholar and MGIC Investment
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bright and MGIC is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Bright Scholar Education and MGIC Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGIC Investment Corp and Bright Scholar 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 Bright Scholar Education 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 Corp has no effect on the direction of Bright Scholar i.e., Bright Scholar and MGIC Investment go up and down completely randomly.
Pair Corralation between Bright Scholar and MGIC Investment
Given the investment horizon of 90 days Bright Scholar Education is expected to generate 3.92 times more return on investment than MGIC Investment. However, Bright Scholar is 3.92 times more volatile than MGIC Investment Corp. It trades about 0.06 of its potential returns per unit of risk. MGIC Investment Corp is currently generating about 0.12 per unit of risk. If you would invest 114.00 in Bright Scholar Education on September 2, 2024 and sell it today you would earn a total of 61.00 from holding Bright Scholar Education or generate 53.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Bright Scholar Education vs. MGIC Investment Corp
Performance |
| Timeline |
| Bright Scholar Education |
| MGIC Investment Corp |
Bright Scholar and MGIC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Scholar and MGIC Investment
The main advantage of trading using opposite Bright Scholar and MGIC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Scholar 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.| Bright Scholar vs. American Public Education | Bright Scholar vs. ATA Creativity Global | Bright Scholar vs. Cogna Educacao SA | Bright Scholar vs. Adtalem Global Education |
| MGIC Investment vs. MBIA Inc | MGIC Investment vs. Assured Guaranty | MGIC Investment vs. Employers Holdings | MGIC Investment vs. James River Group |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |