Correlation Between China Clean and MGIC Investment
Can any of the company-specific risk be diversified away by investing in both China Clean 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 China Clean and MGIC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Clean Energy and MGIC Investment Corp, you can compare the effects of market volatilities on China Clean 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 China Clean with a short position of MGIC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Clean and MGIC Investment.
Diversification Opportunities for China Clean and MGIC Investment
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and MGIC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Clean Energy 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 China Clean 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 China Clean Energy 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 China Clean i.e., China Clean and MGIC Investment go up and down completely randomly.
Pair Corralation between China Clean and MGIC Investment
If you would invest 1,317 in MGIC Investment Corp on November 27, 2024 and sell it today you would earn a total of 1,071 from holding MGIC Investment Corp or generate 81.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
China Clean Energy vs. MGIC Investment Corp
Performance |
| Timeline |
| China Clean Energy |
| MGIC Investment Corp |
China Clean and MGIC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Clean and MGIC Investment
The main advantage of trading using opposite China Clean and MGIC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Clean 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.| China Clean vs. Academy Sports Outdoors | China Clean vs. flyExclusive, | China Clean vs. Emerson Radio | China Clean vs. International Consolidated Airlines |
| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Essent Group | MGIC Investment vs. Assured Guaranty |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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