Correlation Between Mapfre SA and MGIC INVESTMENT
Can any of the company-specific risk be diversified away by investing in both Mapfre SA 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 Mapfre SA and MGIC INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mapfre SA and MGIC INVESTMENT, you can compare the effects of market volatilities on Mapfre SA 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 Mapfre SA with a short position of MGIC INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mapfre SA and MGIC INVESTMENT.
Diversification Opportunities for Mapfre SA and MGIC INVESTMENT
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mapfre and MGIC is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Mapfre SA and MGIC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGIC INVESTMENT and Mapfre SA 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 Mapfre SA 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 Mapfre SA i.e., Mapfre SA and MGIC INVESTMENT go up and down completely randomly.
Pair Corralation between Mapfre SA and MGIC INVESTMENT
Assuming the 90 days trading horizon Mapfre SA is expected to generate 1.45 times more return on investment than MGIC INVESTMENT. However, Mapfre SA is 1.45 times more volatile than MGIC INVESTMENT. It trades about 0.27 of its potential returns per unit of risk. MGIC INVESTMENT is currently generating about 0.28 per unit of risk. If you would invest 243.00 in Mapfre SA on November 3, 2024 and sell it today you would earn a total of 27.00 from holding Mapfre SA or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mapfre SA vs. MGIC INVESTMENT
Performance |
| Timeline |
| Mapfre SA |
| MGIC INVESTMENT |
Mapfre SA and MGIC INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mapfre SA and MGIC INVESTMENT
The main advantage of trading using opposite Mapfre SA and MGIC INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mapfre SA 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.| Mapfre SA vs. FORWARD AIR P | Mapfre SA vs. AEGEAN AIRLINES | Mapfre SA vs. American Airlines Group | Mapfre SA vs. Southwest Airlines Co |
| MGIC INVESTMENT vs. STMICROELECTRONICS | MGIC INVESTMENT vs. Japan Tobacco | MGIC INVESTMENT vs. PEPTONIC MEDICAL | MGIC INVESTMENT vs. MeVis Medical Solutions |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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