Correlation Between MGIC INVESTMENT and CODERE ONLINE
Can any of the company-specific risk be diversified away by investing in both MGIC INVESTMENT and CODERE ONLINE 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 CODERE ONLINE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC INVESTMENT and CODERE ONLINE LUX, you can compare the effects of market volatilities on MGIC INVESTMENT and CODERE ONLINE 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 CODERE ONLINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC INVESTMENT and CODERE ONLINE.
Diversification Opportunities for MGIC INVESTMENT and CODERE ONLINE
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MGIC and CODERE is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding MGIC INVESTMENT and CODERE ONLINE LUX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CODERE ONLINE LUX 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 CODERE ONLINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CODERE ONLINE LUX has no effect on the direction of MGIC INVESTMENT i.e., MGIC INVESTMENT and CODERE ONLINE go up and down completely randomly.
Pair Corralation between MGIC INVESTMENT and CODERE ONLINE
Assuming the 90 days trading horizon MGIC INVESTMENT is expected to generate 2.15 times less return on investment than CODERE ONLINE. But when comparing it to its historical volatility, MGIC INVESTMENT is 3.45 times less risky than CODERE ONLINE. It trades about 0.13 of its potential returns per unit of risk. CODERE ONLINE LUX is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 282.00 in CODERE ONLINE LUX on August 31, 2024 and sell it today you would earn a total of 433.00 from holding CODERE ONLINE LUX or generate 153.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
MGIC INVESTMENT vs. CODERE ONLINE LUX
Performance |
| Timeline |
| MGIC INVESTMENT |
| CODERE ONLINE LUX |
MGIC INVESTMENT and CODERE ONLINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC INVESTMENT and CODERE ONLINE
The main advantage of trading using opposite MGIC INVESTMENT and CODERE ONLINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC INVESTMENT position performs unexpectedly, CODERE ONLINE 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 CODERE ONLINE will offset losses from the drop in CODERE ONLINE's 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 |
| CODERE ONLINE vs. ON SEMICONDUCTOR | CODERE ONLINE vs. MTI WIRELESS EDGE | CODERE ONLINE vs. Magnachip Semiconductor | CODERE ONLINE vs. Entravision Communications |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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