Correlation Between MGIC INVESTMENT and Charter Communications
Can any of the company-specific risk be diversified away by investing in both MGIC INVESTMENT and Charter Communications 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 Charter Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC INVESTMENT and Charter Communications, you can compare the effects of market volatilities on MGIC INVESTMENT and Charter Communications 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 Charter Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC INVESTMENT and Charter Communications.
Diversification Opportunities for MGIC INVESTMENT and Charter Communications
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MGIC and Charter is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding MGIC INVESTMENT and Charter Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications 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 Charter Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Communications has no effect on the direction of MGIC INVESTMENT i.e., MGIC INVESTMENT and Charter Communications go up and down completely randomly.
Pair Corralation between MGIC INVESTMENT and Charter Communications
Assuming the 90 days trading horizon MGIC INVESTMENT is expected to generate 1.42 times less return on investment than Charter Communications. In addition to that, MGIC INVESTMENT is 1.01 times more volatile than Charter Communications. It trades about 0.19 of its total potential returns per unit of risk. Charter Communications is currently generating about 0.27 per unit of volatility. If you would invest 33,645 in Charter Communications on September 2, 2024 and sell it today you would earn a total of 3,695 from holding Charter Communications or generate 10.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGIC INVESTMENT vs. Charter Communications
Performance |
| Timeline |
| MGIC INVESTMENT |
| Charter Communications |
MGIC INVESTMENT and Charter Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC INVESTMENT and Charter Communications
The main advantage of trading using opposite MGIC INVESTMENT and Charter Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC INVESTMENT position performs unexpectedly, Charter Communications 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 Charter Communications will offset losses from the drop in Charter Communications' 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 |
| Charter Communications vs. ALGOMA STEEL GROUP | Charter Communications vs. CosmoSteel Holdings Limited | Charter Communications vs. GLG LIFE TECH | Charter Communications vs. Reliance Steel Aluminum |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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