Correlation Between MGIC INVESTMENT and CNVISION MEDIA
Can any of the company-specific risk be diversified away by investing in both MGIC INVESTMENT and CNVISION MEDIA 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 CNVISION MEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC INVESTMENT and CNVISION MEDIA, you can compare the effects of market volatilities on MGIC INVESTMENT and CNVISION MEDIA 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 CNVISION MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC INVESTMENT and CNVISION MEDIA.
Diversification Opportunities for MGIC INVESTMENT and CNVISION MEDIA
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MGIC and CNVISION is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding MGIC INVESTMENT and CNVISION MEDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNVISION MEDIA 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 CNVISION MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNVISION MEDIA has no effect on the direction of MGIC INVESTMENT i.e., MGIC INVESTMENT and CNVISION MEDIA go up and down completely randomly.
Pair Corralation between MGIC INVESTMENT and CNVISION MEDIA
Assuming the 90 days trading horizon MGIC INVESTMENT is expected to generate 1.24 times less return on investment than CNVISION MEDIA. But when comparing it to its historical volatility, MGIC INVESTMENT is 2.22 times less risky than CNVISION MEDIA. It trades about 0.09 of its potential returns per unit of risk. CNVISION MEDIA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4.80 in CNVISION MEDIA on December 4, 2024 and sell it today you would earn a total of 1.55 from holding CNVISION MEDIA or generate 32.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGIC INVESTMENT vs. CNVISION MEDIA
Performance |
| Timeline |
| MGIC INVESTMENT |
| CNVISION MEDIA |
MGIC INVESTMENT and CNVISION MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC INVESTMENT and CNVISION MEDIA
The main advantage of trading using opposite MGIC INVESTMENT and CNVISION MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC INVESTMENT position performs unexpectedly, CNVISION MEDIA 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 CNVISION MEDIA will offset losses from the drop in CNVISION MEDIA's long position.| MGIC INVESTMENT vs. ProSiebenSat1 Media SE | MGIC INVESTMENT vs. Prosiebensat 1 Media | MGIC INVESTMENT vs. Ubisoft Entertainment SA | MGIC INVESTMENT vs. FIH MOBILE |
| CNVISION MEDIA vs. Semiconductor Manufacturing International | CNVISION MEDIA vs. Magnachip Semiconductor | CNVISION MEDIA vs. Spirent Communications plc | CNVISION MEDIA vs. Geely Automobile Holdings |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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