Correlation Between Investors Title and MGIC Investment
Can any of the company-specific risk be diversified away by investing in both Investors Title 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 Investors Title and MGIC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investors Title and MGIC Investment Corp, you can compare the effects of market volatilities on Investors Title 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 Investors Title with a short position of MGIC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investors Title and MGIC Investment.
Diversification Opportunities for Investors Title and MGIC Investment
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Investors and MGIC is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Investors Title 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 Investors Title 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 Investors Title 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 Investors Title i.e., Investors Title and MGIC Investment go up and down completely randomly.
Pair Corralation between Investors Title and MGIC Investment
Given the investment horizon of 90 days Investors Title is expected to generate 1.37 times more return on investment than MGIC Investment. However, Investors Title is 1.37 times more volatile than MGIC Investment Corp. It trades about 0.35 of its potential returns per unit of risk. MGIC Investment Corp is currently generating about -0.02 per unit of risk. If you would invest 23,239 in Investors Title on August 24, 2024 and sell it today you would earn a total of 4,921 from holding Investors Title or generate 21.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investors Title vs. MGIC Investment Corp
Performance |
| Timeline |
| Investors Title |
| MGIC Investment Corp |
Investors Title and MGIC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investors Title and MGIC Investment
The main advantage of trading using opposite Investors Title and MGIC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investors Title 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.| Investors Title vs. James River Group | Investors Title vs. Employers Holdings | Investors Title vs. AMERISAFE | Investors Title vs. Essent Group |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |