Correlation Between CapitaLand Investment and MGIC Investment
Can any of the company-specific risk be diversified away by investing in both CapitaLand Investment 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 CapitaLand Investment and MGIC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CapitaLand Investment Limited and MGIC Investment Corp, you can compare the effects of market volatilities on CapitaLand Investment 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 CapitaLand Investment with a short position of MGIC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CapitaLand Investment and MGIC Investment.
Diversification Opportunities for CapitaLand Investment and MGIC Investment
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CapitaLand and MGIC is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding CapitaLand Investment Limited 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 CapitaLand Investment 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 CapitaLand Investment Limited 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 CapitaLand Investment i.e., CapitaLand Investment and MGIC Investment go up and down completely randomly.
Pair Corralation between CapitaLand Investment and MGIC Investment
Assuming the 90 days horizon CapitaLand Investment is expected to generate 1.62 times less return on investment than MGIC Investment. In addition to that, CapitaLand Investment is 3.65 times more volatile than MGIC Investment Corp. It trades about 0.02 of its total potential returns per unit of risk. MGIC Investment Corp is currently generating about 0.12 per unit of volatility. If you would invest 1,736 in MGIC Investment Corp on September 2, 2024 and sell it today you would earn a total of 890.00 from holding MGIC Investment Corp or generate 51.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CapitaLand Investment Limited vs. MGIC Investment Corp
Performance |
| Timeline |
| CapitaLand Investment |
| MGIC Investment Corp |
CapitaLand Investment and MGIC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CapitaLand Investment and MGIC Investment
The main advantage of trading using opposite CapitaLand Investment and MGIC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CapitaLand Investment 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.| CapitaLand Investment vs. IRSA Inversiones Y | CapitaLand Investment vs. Anywhere Real Estate | CapitaLand Investment vs. Newmark Group | CapitaLand Investment vs. New York City |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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