Correlation Between MGIC Investment and CT Real

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and CT Real 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 CT Real 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 CT Real Estate, you can compare the effects of market volatilities on MGIC Investment and CT Real 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 CT Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and CT Real.

Diversification Opportunities for MGIC Investment and CT Real

0.4
  Correlation Coefficient

Very weak diversification

The 3 months correlation between MGIC and CTRRF is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and CT Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CT Real Estate 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 CT Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CT Real Estate has no effect on the direction of MGIC Investment i.e., MGIC Investment and CT Real go up and down completely randomly.

Pair Corralation between MGIC Investment and CT Real

Considering the 90-day investment horizon MGIC Investment Corp is expected to generate 0.36 times more return on investment than CT Real. However, MGIC Investment Corp is 2.76 times less risky than CT Real. It trades about 0.11 of its potential returns per unit of risk. CT Real Estate is currently generating about 0.01 per unit of risk. If you would invest  1,244  in MGIC Investment Corp on August 30, 2024 and sell it today you would earn a total of  1,367  from holding MGIC Investment Corp or generate 109.89% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy63.43%
ValuesDaily Returns

MGIC Investment Corp  vs.  CT Real Estate

 Performance 
       Timeline  
MGIC Investment Corp 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in MGIC Investment Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, MGIC Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
CT Real Estate 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CT Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CT Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

MGIC Investment and CT Real Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with MGIC Investment and CT Real

The main advantage of trading using opposite MGIC Investment and CT Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, CT Real 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 CT Real will offset losses from the drop in CT Real's long position.
The idea behind MGIC Investment Corp and CT Real Estate pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

Other Complementary Tools

Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Stocks Directory
Find actively traded stocks across global markets
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios