Correlation Between FUYO GENERAL and MGIC INVESTMENT
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL 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 FUYO GENERAL and MGIC INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FUYO GENERAL LEASE and MGIC INVESTMENT, you can compare the effects of market volatilities on FUYO GENERAL 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 FUYO GENERAL with a short position of MGIC INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and MGIC INVESTMENT.
Diversification Opportunities for FUYO GENERAL and MGIC INVESTMENT
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between FUYO and MGIC is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE and MGIC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGIC INVESTMENT and FUYO GENERAL 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 FUYO GENERAL LEASE 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 FUYO GENERAL i.e., FUYO GENERAL and MGIC INVESTMENT go up and down completely randomly.
Pair Corralation between FUYO GENERAL and MGIC INVESTMENT
Assuming the 90 days horizon FUYO GENERAL is expected to generate 1.1 times less return on investment than MGIC INVESTMENT. But when comparing it to its historical volatility, FUYO GENERAL LEASE is 1.35 times less risky than MGIC INVESTMENT. It trades about 0.25 of its potential returns per unit of risk. MGIC INVESTMENT is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,307 in MGIC INVESTMENT on August 31, 2024 and sell it today you would earn a total of 193.00 from holding MGIC INVESTMENT or generate 8.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUYO GENERAL LEASE vs. MGIC INVESTMENT
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| MGIC INVESTMENT |
FUYO GENERAL and MGIC INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and MGIC INVESTMENT
The main advantage of trading using opposite FUYO GENERAL and MGIC INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL 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.| FUYO GENERAL vs. United Rentals | FUYO GENERAL vs. WillScot Mobile Mini | FUYO GENERAL vs. Superior Plus Corp | FUYO GENERAL vs. NMI Holdings |
| MGIC INVESTMENT vs. SIVERS SEMICONDUCTORS AB | MGIC INVESTMENT vs. Darden Restaurants | MGIC INVESTMENT vs. Reliance Steel Aluminum | MGIC INVESTMENT vs. Q2M Managementberatung AG |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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