Correlation Between MGIC Investment and Vita Coco
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and Vita Coco 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 Vita Coco 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 Vita Coco, you can compare the effects of market volatilities on MGIC Investment and Vita Coco 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 Vita Coco. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and Vita Coco.
Diversification Opportunities for MGIC Investment and Vita Coco
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between MGIC and Vita is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and Vita Coco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vita Coco 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 Vita Coco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vita Coco has no effect on the direction of MGIC Investment i.e., MGIC Investment and Vita Coco go up and down completely randomly.
Pair Corralation between MGIC Investment and Vita Coco
Considering the 90-day investment horizon MGIC Investment Corp is expected to generate 0.57 times more return on investment than Vita Coco. However, MGIC Investment Corp is 1.75 times less risky than Vita Coco. It trades about 0.12 of its potential returns per unit of risk. Vita Coco is currently generating about 0.06 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGIC Investment Corp vs. Vita Coco
Performance |
| Timeline |
| MGIC Investment Corp |
| Vita Coco |
MGIC Investment and Vita Coco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and Vita Coco
The main advantage of trading using opposite MGIC Investment and Vita Coco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, Vita Coco 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 Vita Coco will offset losses from the drop in Vita Coco's long position.| MGIC Investment vs. MBIA Inc | MGIC Investment vs. Assured Guaranty | MGIC Investment vs. Employers Holdings | MGIC Investment vs. James River Group |
| Vita Coco vs. Coca Cola Femsa SAB | Vita Coco vs. Coca Cola European Partners | Vita Coco vs. Embotelladora Andina SA | Vita Coco vs. Monster Beverage 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |