Correlation Between MGIC INVESTMENT and Data#3
Can any of the company-specific risk be diversified away by investing in both MGIC INVESTMENT and Data#3 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 Data#3 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC INVESTMENT and Data3 Limited, you can compare the effects of market volatilities on MGIC INVESTMENT and Data#3 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 Data#3. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC INVESTMENT and Data#3.
Diversification Opportunities for MGIC INVESTMENT and Data#3
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MGIC and Data#3 is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding MGIC INVESTMENT and Data3 Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Data3 Limited 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 Data#3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Data3 Limited has no effect on the direction of MGIC INVESTMENT i.e., MGIC INVESTMENT and Data#3 go up and down completely randomly.
Pair Corralation between MGIC INVESTMENT and Data#3
Assuming the 90 days trading horizon MGIC INVESTMENT is expected to generate 0.45 times more return on investment than Data#3. However, MGIC INVESTMENT is 2.2 times less risky than Data#3. It trades about 0.13 of its potential returns per unit of risk. Data3 Limited is currently generating about 0.03 per unit of risk. If you would invest 1,434 in MGIC INVESTMENT on August 31, 2024 and sell it today you would earn a total of 1,046 from holding MGIC INVESTMENT or generate 72.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
MGIC INVESTMENT vs. Data3 Limited
Performance |
| Timeline |
| MGIC INVESTMENT |
| Data3 Limited |
MGIC INVESTMENT and Data#3 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC INVESTMENT and Data#3
The main advantage of trading using opposite MGIC INVESTMENT and Data#3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC INVESTMENT position performs unexpectedly, Data#3 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 Data#3 will offset losses from the drop in Data#3's long position.| MGIC INVESTMENT vs. SIVERS SEMICONDUCTORS AB | MGIC INVESTMENT vs. Darden Restaurants | MGIC INVESTMENT vs. Reliance Steel Aluminum | MGIC INVESTMENT vs. Q2M Managementberatung AG |
| Data#3 vs. FUJITSU LTD ADR | Data#3 vs. Superior Plus Corp | Data#3 vs. NMI Holdings | Data#3 vs. Origin Agritech |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |