Correlation Between MGIC Investment and Cohen Circle
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and Cohen Circle 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 Cohen Circle 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 Cohen Circle Acquisition, you can compare the effects of market volatilities on MGIC Investment and Cohen Circle 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 Cohen Circle. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and Cohen Circle.
Diversification Opportunities for MGIC Investment and Cohen Circle
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between MGIC and Cohen is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and Cohen Circle Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Circle Acquisition 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 Cohen Circle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Circle Acquisition has no effect on the direction of MGIC Investment i.e., MGIC Investment and Cohen Circle go up and down completely randomly.
Pair Corralation between MGIC Investment and Cohen Circle
Considering the 90-day investment horizon MGIC Investment Corp is expected to generate 17.88 times more return on investment than Cohen Circle. However, MGIC Investment is 17.88 times more volatile than Cohen Circle Acquisition. It trades about 0.06 of its potential returns per unit of risk. Cohen Circle Acquisition is currently generating about 0.06 per unit of risk. If you would invest 2,489 in MGIC Investment Corp on September 2, 2024 and sell it today you would earn a total of 137.00 from holding MGIC Investment Corp or generate 5.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 57.81% |
| Values | Daily Returns |
MGIC Investment Corp vs. Cohen Circle Acquisition
Performance |
| Timeline |
| MGIC Investment Corp |
| Cohen Circle Acquisition |
MGIC Investment and Cohen Circle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and Cohen Circle
The main advantage of trading using opposite MGIC Investment and Cohen Circle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, Cohen Circle 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 Cohen Circle will offset losses from the drop in Cohen Circle's long position.| MGIC Investment vs. MBIA Inc | MGIC Investment vs. Assured Guaranty | MGIC Investment vs. Employers Holdings | MGIC Investment vs. James River Group |
| Cohen Circle vs. Voyager Acquisition Corp | Cohen Circle vs. CO2 Energy Transition | Cohen Circle vs. Vine Hill Capital | Cohen Circle vs. DUET Acquisition Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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