Correlation Between MGIC Investment and BOS Better
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and BOS Better 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 BOS Better into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC Investment Corp and BOS Better Online, you can compare the effects of market volatilities on MGIC Investment and BOS Better 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 BOS Better. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and BOS Better.
Diversification Opportunities for MGIC Investment and BOS Better
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MGIC and BOS is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and BOS Better Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOS Better Online 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 Corp are associated (or correlated) with BOS Better. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOS Better Online has no effect on the direction of MGIC Investment i.e., MGIC Investment and BOS Better go up and down completely randomly.
Pair Corralation between MGIC Investment and BOS Better
Considering the 90-day investment horizon MGIC Investment Corp is expected to generate 0.55 times more return on investment than BOS Better. However, MGIC Investment Corp is 1.8 times less risky than BOS Better. It trades about 0.11 of its potential returns per unit of risk. BOS Better Online is currently generating about 0.05 per unit of risk. If you would invest 1,255 in MGIC Investment Corp on September 3, 2024 and sell it today you would earn a total of 1,371 from holding MGIC Investment Corp or generate 109.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGIC Investment Corp vs. BOS Better Online
Performance |
| Timeline |
| MGIC Investment Corp |
| BOS Better Online |
MGIC Investment and BOS Better Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and BOS Better
The main advantage of trading using opposite MGIC Investment and BOS Better positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, BOS Better 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 BOS Better will offset losses from the drop in BOS Better's long position.| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Essent Group | MGIC Investment vs. Assured Guaranty |
| BOS Better vs. Highway Holdings Limited | BOS Better vs. QCR Holdings | BOS Better vs. Partner Communications | BOS Better vs. Acumen Pharmaceuticals |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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