Correlation Between MGIC INVESTMENT and Metalla Royalty
Can any of the company-specific risk be diversified away by investing in both MGIC INVESTMENT and Metalla Royalty 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 Metalla Royalty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC INVESTMENT and Metalla Royalty Streaming, you can compare the effects of market volatilities on MGIC INVESTMENT and Metalla Royalty 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 Metalla Royalty. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC INVESTMENT and Metalla Royalty.
Diversification Opportunities for MGIC INVESTMENT and Metalla Royalty
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between MGIC and Metalla is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding MGIC INVESTMENT and Metalla Royalty Streaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalla Royalty Streaming 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 Metalla Royalty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metalla Royalty Streaming has no effect on the direction of MGIC INVESTMENT i.e., MGIC INVESTMENT and Metalla Royalty go up and down completely randomly.
Pair Corralation between MGIC INVESTMENT and Metalla Royalty
Assuming the 90 days trading horizon MGIC INVESTMENT is expected to generate 0.5 times more return on investment than Metalla Royalty. However, MGIC INVESTMENT is 1.99 times less risky than Metalla Royalty. It trades about 0.07 of its potential returns per unit of risk. Metalla Royalty Streaming is currently generating about -0.1 per unit of risk. If you would invest 2,340 in MGIC INVESTMENT on September 15, 2024 and sell it today you would earn a total of 40.00 from holding MGIC INVESTMENT or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
MGIC INVESTMENT vs. Metalla Royalty Streaming
Performance |
| Timeline |
| MGIC INVESTMENT |
| Metalla Royalty Streaming |
MGIC INVESTMENT and Metalla Royalty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC INVESTMENT and Metalla Royalty
The main advantage of trading using opposite MGIC INVESTMENT and Metalla Royalty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC INVESTMENT position performs unexpectedly, Metalla Royalty 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 Metalla Royalty will offset losses from the drop in Metalla Royalty's long position.| MGIC INVESTMENT vs. Sterling Construction | MGIC INVESTMENT vs. Singapore Reinsurance | MGIC INVESTMENT vs. REVO INSURANCE SPA | MGIC INVESTMENT vs. Universal Insurance Holdings |
| Metalla Royalty vs. MGIC INVESTMENT | Metalla Royalty vs. United Insurance Holdings | Metalla Royalty vs. AGNC INVESTMENT | Metalla Royalty vs. REGAL ASIAN INVESTMENTS |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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