Correlation Between MGIC INVESTMENT and GEELY AUTOMOBILE
Can any of the company-specific risk be diversified away by investing in both MGIC INVESTMENT and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC INVESTMENT and GEELY AUTOMOBILE, you can compare the effects of market volatilities on MGIC INVESTMENT and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC INVESTMENT and GEELY AUTOMOBILE.
Diversification Opportunities for MGIC INVESTMENT and GEELY AUTOMOBILE
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MGIC and GEELY is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding MGIC INVESTMENT and GEELY AUTOMOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEELY AUTOMOBILE has no effect on the direction of MGIC INVESTMENT i.e., MGIC INVESTMENT and GEELY AUTOMOBILE go up and down completely randomly.
Pair Corralation between MGIC INVESTMENT and GEELY AUTOMOBILE
Assuming the 90 days trading horizon MGIC INVESTMENT is expected to generate 0.63 times more return on investment than GEELY AUTOMOBILE. However, MGIC INVESTMENT is 1.58 times less risky than GEELY AUTOMOBILE. It trades about 0.16 of its potential returns per unit of risk. GEELY AUTOMOBILE is currently generating about -0.17 per unit of risk. If you would invest 2,307 in MGIC INVESTMENT on August 28, 2024 and sell it today you would earn a total of 133.00 from holding MGIC INVESTMENT or generate 5.77% 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. GEELY AUTOMOBILE
Performance |
| Timeline |
| MGIC INVESTMENT |
| GEELY AUTOMOBILE |
MGIC INVESTMENT and GEELY AUTOMOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC INVESTMENT and GEELY AUTOMOBILE
The main advantage of trading using opposite MGIC INVESTMENT and GEELY AUTOMOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC INVESTMENT position performs unexpectedly, GEELY AUTOMOBILE 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 GEELY AUTOMOBILE will offset losses from the drop in GEELY AUTOMOBILE'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 |
| GEELY AUTOMOBILE vs. Sekisui Chemical Co | GEELY AUTOMOBILE vs. Adtalem Global Education | GEELY AUTOMOBILE vs. KINGBOARD CHEMICAL | GEELY AUTOMOBILE vs. G8 EDUCATION |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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