Correlation Between MGIC INVESTMENT and Retail Estates
Can any of the company-specific risk be diversified away by investing in both MGIC INVESTMENT and Retail Estates 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 Retail Estates into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC INVESTMENT and Retail Estates NV, you can compare the effects of market volatilities on MGIC INVESTMENT and Retail Estates 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 Retail Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC INVESTMENT and Retail Estates.
Diversification Opportunities for MGIC INVESTMENT and Retail Estates
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between MGIC and Retail is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding MGIC INVESTMENT and Retail Estates NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Estates NV 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 Retail Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Estates NV has no effect on the direction of MGIC INVESTMENT i.e., MGIC INVESTMENT and Retail Estates go up and down completely randomly.
Pair Corralation between MGIC INVESTMENT and Retail Estates
Assuming the 90 days trading horizon MGIC INVESTMENT is expected to generate 1.36 times more return on investment than Retail Estates. However, MGIC INVESTMENT is 1.36 times more volatile than Retail Estates NV. It trades about 0.03 of its potential returns per unit of risk. Retail Estates NV is currently generating about -0.17 per unit of risk. If you would invest 2,307 in MGIC INVESTMENT on October 26, 2024 and sell it today you would earn a total of 53.00 from holding MGIC INVESTMENT or generate 2.3% 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. Retail Estates NV
Performance |
| Timeline |
| MGIC INVESTMENT |
| Retail Estates NV |
MGIC INVESTMENT and Retail Estates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC INVESTMENT and Retail Estates
The main advantage of trading using opposite MGIC INVESTMENT and Retail Estates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC INVESTMENT position performs unexpectedly, Retail Estates 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 Retail Estates will offset losses from the drop in Retail Estates' long position.| MGIC INVESTMENT vs. Gaming and Leisure | MGIC INVESTMENT vs. TERADATA | MGIC INVESTMENT vs. Pure Storage | MGIC INVESTMENT vs. Cass Information Systems |
| Retail Estates vs. Neinor Homes SA | Retail Estates vs. OFFICE DEPOT | Retail Estates vs. CENTURIA OFFICE REIT | Retail Estates vs. MGIC INVESTMENT |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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