Correlation Between MGIC Investment and CapitaLand Investment
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and CapitaLand Investment 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 CapitaLand Investment 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 CapitaLand Investment Limited, you can compare the effects of market volatilities on MGIC Investment and CapitaLand Investment 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 CapitaLand Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and CapitaLand Investment.
Diversification Opportunities for MGIC Investment and CapitaLand Investment
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MGIC and CapitaLand is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and CapitaLand Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CapitaLand Investment 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 CapitaLand Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CapitaLand Investment has no effect on the direction of MGIC Investment i.e., MGIC Investment and CapitaLand Investment go up and down completely randomly.
Pair Corralation between MGIC Investment and CapitaLand Investment
Considering the 90-day investment horizon MGIC Investment Corp is expected to generate 0.27 times more return on investment than CapitaLand Investment. However, MGIC Investment Corp is 3.65 times less risky than CapitaLand Investment. It trades about 0.12 of its potential returns per unit of risk. CapitaLand Investment Limited is currently generating about 0.02 per unit of risk. If you would invest 1,736 in MGIC Investment Corp on September 2, 2024 and sell it today you would earn a total of 890.00 from holding MGIC Investment Corp or generate 51.27% 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. CapitaLand Investment Limited
Performance |
| Timeline |
| MGIC Investment Corp |
| CapitaLand Investment |
MGIC Investment and CapitaLand Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and CapitaLand Investment
The main advantage of trading using opposite MGIC Investment and CapitaLand Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, CapitaLand Investment 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 CapitaLand Investment will offset losses from the drop in CapitaLand Investment's long position.| MGIC Investment vs. MBIA Inc | MGIC Investment vs. Assured Guaranty | MGIC Investment vs. Employers Holdings | MGIC Investment vs. James River Group |
| CapitaLand Investment vs. IRSA Inversiones Y | CapitaLand Investment vs. Anywhere Real Estate | CapitaLand Investment vs. Newmark Group | CapitaLand Investment vs. New York City |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |