Correlation Between MGIC INVESTMENT and ARDAGH METAL
Can any of the company-specific risk be diversified away by investing in both MGIC INVESTMENT and ARDAGH METAL 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 ARDAGH METAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC INVESTMENT and ARDAGH METAL PACDL 0001, you can compare the effects of market volatilities on MGIC INVESTMENT and ARDAGH METAL 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 ARDAGH METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC INVESTMENT and ARDAGH METAL.
Diversification Opportunities for MGIC INVESTMENT and ARDAGH METAL
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MGIC and ARDAGH is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding MGIC INVESTMENT and ARDAGH METAL PACDL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARDAGH METAL PACDL 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 ARDAGH METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARDAGH METAL PACDL has no effect on the direction of MGIC INVESTMENT i.e., MGIC INVESTMENT and ARDAGH METAL go up and down completely randomly.
Pair Corralation between MGIC INVESTMENT and ARDAGH METAL
Assuming the 90 days trading horizon MGIC INVESTMENT is expected to generate 1.69 times less return on investment than ARDAGH METAL. But when comparing it to its historical volatility, MGIC INVESTMENT is 1.62 times less risky than ARDAGH METAL. It trades about 0.16 of its potential returns per unit of risk. ARDAGH METAL PACDL 0001 is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 332.00 in ARDAGH METAL PACDL 0001 on August 28, 2024 and sell it today you would earn a total of 32.00 from holding ARDAGH METAL PACDL 0001 or generate 9.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGIC INVESTMENT vs. ARDAGH METAL PACDL 0001
Performance |
| Timeline |
| MGIC INVESTMENT |
| ARDAGH METAL PACDL |
MGIC INVESTMENT and ARDAGH METAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC INVESTMENT and ARDAGH METAL
The main advantage of trading using opposite MGIC INVESTMENT and ARDAGH METAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC INVESTMENT position performs unexpectedly, ARDAGH METAL 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 ARDAGH METAL will offset losses from the drop in ARDAGH METAL's long position.| MGIC INVESTMENT vs. Avanos Medical | MGIC INVESTMENT vs. Ryanair Holdings plc | MGIC INVESTMENT vs. MEDICAL FACILITIES NEW | MGIC INVESTMENT vs. CHINA TONTINE WINES |
| ARDAGH METAL vs. AptarGroup | ARDAGH METAL vs. Superior Plus Corp | ARDAGH METAL vs. NMI Holdings | ARDAGH METAL 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |