Correlation Between Highlight Communications and MGIC INVESTMENT
Can any of the company-specific risk be diversified away by investing in both Highlight Communications 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 Highlight Communications and MGIC INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highlight Communications AG and MGIC INVESTMENT, you can compare the effects of market volatilities on Highlight Communications 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 Highlight Communications with a short position of MGIC INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Communications and MGIC INVESTMENT.
Diversification Opportunities for Highlight Communications and MGIC INVESTMENT
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Highlight and MGIC is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG and MGIC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGIC INVESTMENT and Highlight Communications 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 Highlight Communications AG 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 Highlight Communications i.e., Highlight Communications and MGIC INVESTMENT go up and down completely randomly.
Pair Corralation between Highlight Communications and MGIC INVESTMENT
Assuming the 90 days trading horizon Highlight Communications AG is expected to under-perform the MGIC INVESTMENT. In addition to that, Highlight Communications is 2.9 times more volatile than MGIC INVESTMENT. It trades about -0.27 of its total potential returns per unit of risk. MGIC INVESTMENT is currently generating about -0.31 per unit of volatility. If you would invest 2,447 in MGIC INVESTMENT on December 10, 2024 and sell it today you would lose (247.00) from holding MGIC INVESTMENT or give up 10.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highlight Communications AG vs. MGIC INVESTMENT
Performance |
| Timeline |
| Highlight Communications |
| MGIC INVESTMENT |
Highlight Communications and MGIC INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlight Communications and MGIC INVESTMENT
The main advantage of trading using opposite Highlight Communications and MGIC INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Communications 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.| Highlight Communications vs. Chesapeake Utilities | Highlight Communications vs. Fast Retailing Co | Highlight Communications vs. CITY OFFICE REIT | Highlight Communications vs. Tower One Wireless |
| MGIC INVESTMENT vs. ALBIS LEASING AG | MGIC INVESTMENT vs. Air Lease | MGIC INVESTMENT vs. PREMIER FOODS | MGIC INVESTMENT vs. Sixt Leasing SE |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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