Correlation Between MGIC Investment and Beyond Meat
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and Beyond Meat 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 Beyond Meat 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 Beyond Meat, you can compare the effects of market volatilities on MGIC Investment and Beyond Meat 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 Beyond Meat. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and Beyond Meat.
Diversification Opportunities for MGIC Investment and Beyond Meat
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MGIC and Beyond is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and Beyond Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Meat 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 Beyond Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Meat has no effect on the direction of MGIC Investment i.e., MGIC Investment and Beyond Meat go up and down completely randomly.
Pair Corralation between MGIC Investment and Beyond Meat
Considering the 90-day investment horizon MGIC Investment Corp is expected to generate 0.3 times more return on investment than Beyond Meat. However, MGIC Investment Corp is 3.35 times less risky than Beyond Meat. It trades about 0.11 of its potential returns per unit of risk. Beyond Meat is currently generating about -0.05 per unit of risk. If you would invest 1,189 in MGIC Investment Corp on December 1, 2024 and sell it today you would earn a total of 1,272 from holding MGIC Investment Corp or generate 106.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGIC Investment Corp vs. Beyond Meat
Performance |
| Timeline |
| MGIC Investment Corp |
| Beyond Meat |
MGIC Investment and Beyond Meat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and Beyond Meat
The main advantage of trading using opposite MGIC Investment and Beyond Meat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, Beyond Meat 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 Beyond Meat will offset losses from the drop in Beyond Meat's long position.| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Essent Group | MGIC Investment vs. Assured Guaranty |
| Beyond Meat vs. Kraft Heinz Co | Beyond Meat vs. Hormel Foods | Beyond Meat vs. Kellanova | Beyond Meat vs. General Mills |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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