Correlation Between MGIC Investment and Eidesvik Offshore
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and Eidesvik Offshore 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 MGIC Investment and Eidesvik Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC Investment and Eidesvik Offshore ASA, you can compare the effects of market volatilities on MGIC Investment and Eidesvik Offshore 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 MGIC Investment with a short position of Eidesvik Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and Eidesvik Offshore.
Diversification Opportunities for MGIC Investment and Eidesvik Offshore
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between MGIC and Eidesvik is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment and Eidesvik Offshore ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eidesvik Offshore ASA and MGIC Investment 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 MGIC Investment are associated (or correlated) with Eidesvik Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eidesvik Offshore ASA has no effect on the direction of MGIC Investment i.e., MGIC Investment and Eidesvik Offshore go up and down completely randomly.
Pair Corralation between MGIC Investment and Eidesvik Offshore
Assuming the 90 days horizon MGIC Investment is expected to generate 0.91 times more return on investment than Eidesvik Offshore. However, MGIC Investment is 1.1 times less risky than Eidesvik Offshore. It trades about 0.14 of its potential returns per unit of risk. Eidesvik Offshore ASA is currently generating about -0.07 per unit of risk. If you would invest 2,280 in MGIC Investment on November 3, 2024 and sell it today you would earn a total of 140.00 from holding MGIC Investment or generate 6.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
MGIC Investment vs. Eidesvik Offshore ASA
Performance |
| Timeline |
| MGIC Investment |
| Eidesvik Offshore ASA |
MGIC Investment and Eidesvik Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and Eidesvik Offshore
The main advantage of trading using opposite MGIC Investment and Eidesvik Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, Eidesvik Offshore 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 Eidesvik Offshore will offset losses from the drop in Eidesvik Offshore's long position.| MGIC Investment vs. ELMOS SEMICONDUCTOR | MGIC Investment vs. TRADELINK ELECTRON | MGIC Investment vs. Canon Marketing Japan | MGIC Investment vs. Hua Hong Semiconductor |
| Eidesvik Offshore vs. Altair Engineering | Eidesvik Offshore vs. CONTAGIOUS GAMING INC | Eidesvik Offshore vs. RYANAIR HLDGS ADR | Eidesvik Offshore vs. Boyd Gaming |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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