Correlation Between MGIC INVESTMENT and CN MODERN
Can any of the company-specific risk be diversified away by investing in both MGIC INVESTMENT and CN MODERN 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 CN MODERN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC INVESTMENT and CN MODERN DAIRY, you can compare the effects of market volatilities on MGIC INVESTMENT and CN MODERN 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 CN MODERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC INVESTMENT and CN MODERN.
Diversification Opportunities for MGIC INVESTMENT and CN MODERN
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MGIC and 07M is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding MGIC INVESTMENT and CN MODERN DAIRY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN MODERN DAIRY 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 CN MODERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN MODERN DAIRY has no effect on the direction of MGIC INVESTMENT i.e., MGIC INVESTMENT and CN MODERN go up and down completely randomly.
Pair Corralation between MGIC INVESTMENT and CN MODERN
Assuming the 90 days trading horizon MGIC INVESTMENT is expected to generate 0.45 times more return on investment than CN MODERN. However, MGIC INVESTMENT is 2.2 times less risky than CN MODERN. It trades about 0.12 of its potential returns per unit of risk. CN MODERN DAIRY is currently generating about 0.03 per unit of risk. If you would invest 1,157 in MGIC INVESTMENT on September 20, 2024 and sell it today you would earn a total of 1,163 from holding MGIC INVESTMENT or generate 100.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGIC INVESTMENT vs. CN MODERN DAIRY
Performance |
| Timeline |
| MGIC INVESTMENT |
| CN MODERN DAIRY |
MGIC INVESTMENT and CN MODERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC INVESTMENT and CN MODERN
The main advantage of trading using opposite MGIC INVESTMENT and CN MODERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC INVESTMENT position performs unexpectedly, CN MODERN 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 CN MODERN will offset losses from the drop in CN MODERN's long position.| MGIC INVESTMENT vs. Apple Inc | MGIC INVESTMENT vs. Apple Inc | MGIC INVESTMENT vs. Apple Inc | MGIC INVESTMENT vs. Microsoft |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges |