Correlation Between MGIC INVESTMENT and CAL MAINE
Can any of the company-specific risk be diversified away by investing in both MGIC INVESTMENT and CAL MAINE 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 CAL MAINE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC INVESTMENT and CAL MAINE FOODS, you can compare the effects of market volatilities on MGIC INVESTMENT and CAL MAINE 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 CAL MAINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC INVESTMENT and CAL MAINE.
Diversification Opportunities for MGIC INVESTMENT and CAL MAINE
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MGIC and CAL is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding MGIC INVESTMENT and CAL MAINE FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAL MAINE FOODS 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 CAL MAINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAL MAINE FOODS has no effect on the direction of MGIC INVESTMENT i.e., MGIC INVESTMENT and CAL MAINE go up and down completely randomly.
Pair Corralation between MGIC INVESTMENT and CAL MAINE
Assuming the 90 days trading horizon MGIC INVESTMENT is expected to generate 1.32 times less return on investment than CAL MAINE. In addition to that, MGIC INVESTMENT is 1.1 times more volatile than CAL MAINE FOODS. It trades about 0.21 of its total potential returns per unit of risk. CAL MAINE FOODS is currently generating about 0.3 per unit of volatility. If you would invest 8,174 in CAL MAINE FOODS on August 30, 2024 and sell it today you would earn a total of 976.00 from holding CAL MAINE FOODS or generate 11.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
MGIC INVESTMENT vs. CAL MAINE FOODS
Performance |
| Timeline |
| MGIC INVESTMENT |
| CAL MAINE FOODS |
MGIC INVESTMENT and CAL MAINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC INVESTMENT and CAL MAINE
The main advantage of trading using opposite MGIC INVESTMENT and CAL MAINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC INVESTMENT position performs unexpectedly, CAL MAINE 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 CAL MAINE will offset losses from the drop in CAL MAINE's long position.| MGIC INVESTMENT vs. Lion One Metals | MGIC INVESTMENT vs. Harmony Gold Mining | MGIC INVESTMENT vs. GALENA MINING LTD | MGIC INVESTMENT vs. Perseus Mining Limited |
| CAL MAINE vs. MGIC INVESTMENT | CAL MAINE vs. Strategic Investments AS | CAL MAINE vs. Virtus Investment Partners | CAL MAINE vs. CHIBA BANK |
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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