Correlation Between Lyft and MGIC INVESTMENT
Can any of the company-specific risk be diversified away by investing in both Lyft 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 Lyft and MGIC INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyft Inc and MGIC INVESTMENT, you can compare the effects of market volatilities on Lyft 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 Lyft with a short position of MGIC INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyft and MGIC INVESTMENT.
Diversification Opportunities for Lyft and MGIC INVESTMENT
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lyft and MGIC is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lyft Inc and MGIC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGIC INVESTMENT and Lyft 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 Lyft Inc 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 Lyft i.e., Lyft and MGIC INVESTMENT go up and down completely randomly.
Pair Corralation between Lyft and MGIC INVESTMENT
Assuming the 90 days horizon Lyft Inc is expected to generate 3.36 times more return on investment than MGIC INVESTMENT. However, Lyft is 3.36 times more volatile than MGIC INVESTMENT. It trades about 0.21 of its potential returns per unit of risk. MGIC INVESTMENT is currently generating about 0.21 per unit of risk. If you would invest 1,267 in Lyft Inc on August 30, 2024 and sell it today you would earn a total of 378.00 from holding Lyft Inc or generate 29.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lyft Inc vs. MGIC INVESTMENT
Performance |
| Timeline |
| Lyft Inc |
| MGIC INVESTMENT |
Lyft and MGIC INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyft and MGIC INVESTMENT
The main advantage of trading using opposite Lyft and MGIC INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyft 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.| Lyft vs. MGIC INVESTMENT | Lyft vs. SANOK RUBBER ZY | Lyft vs. Hyster Yale Materials Handling | Lyft vs. Virtus Investment Partners |
| MGIC INVESTMENT vs. Lion One Metals | MGIC INVESTMENT vs. Harmony Gold Mining | MGIC INVESTMENT vs. GALENA MINING LTD | MGIC INVESTMENT vs. Perseus Mining Limited |
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.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |