Correlation Between MGIC INVESTMENT and CHEMICAL INDUSTRIES
Can any of the company-specific risk be diversified away by investing in both MGIC INVESTMENT and CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC INVESTMENT and CHEMICAL INDUSTRIES, you can compare the effects of market volatilities on MGIC INVESTMENT and CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC INVESTMENT and CHEMICAL INDUSTRIES.
Diversification Opportunities for MGIC INVESTMENT and CHEMICAL INDUSTRIES
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MGIC and CHEMICAL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MGIC INVESTMENT and CHEMICAL INDUSTRIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHEMICAL INDUSTRIES has no effect on the direction of MGIC INVESTMENT i.e., MGIC INVESTMENT and CHEMICAL INDUSTRIES go up and down completely randomly.
Pair Corralation between MGIC INVESTMENT and CHEMICAL INDUSTRIES
If you would invest 2,267 in MGIC INVESTMENT on August 31, 2024 and sell it today you would earn a total of 233.00 from holding MGIC INVESTMENT or generate 10.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGIC INVESTMENT vs. CHEMICAL INDUSTRIES
Performance |
| Timeline |
| MGIC INVESTMENT |
| CHEMICAL INDUSTRIES |
MGIC INVESTMENT and CHEMICAL INDUSTRIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC INVESTMENT and CHEMICAL INDUSTRIES
The main advantage of trading using opposite MGIC INVESTMENT and CHEMICAL INDUSTRIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC INVESTMENT position performs unexpectedly, CHEMICAL INDUSTRIES 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 CHEMICAL INDUSTRIES will offset losses from the drop in CHEMICAL INDUSTRIES'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 |
| CHEMICAL INDUSTRIES vs. SIVERS SEMICONDUCTORS AB | CHEMICAL INDUSTRIES vs. Darden Restaurants | CHEMICAL INDUSTRIES vs. Reliance Steel Aluminum | CHEMICAL INDUSTRIES vs. Q2M Managementberatung AG |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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