Correlation Between MGIC Investment and Edgewell Personal
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and Edgewell Personal 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 Edgewell Personal 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 Edgewell Personal Care, you can compare the effects of market volatilities on MGIC Investment and Edgewell Personal 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 Edgewell Personal. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and Edgewell Personal.
Diversification Opportunities for MGIC Investment and Edgewell Personal
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between MGIC and Edgewell is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and Edgewell Personal Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgewell Personal Care 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 Edgewell Personal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgewell Personal Care has no effect on the direction of MGIC Investment i.e., MGIC Investment and Edgewell Personal go up and down completely randomly.
Pair Corralation between MGIC Investment and Edgewell Personal
Considering the 90-day investment horizon MGIC Investment Corp is expected to generate 1.52 times more return on investment than Edgewell Personal. However, MGIC Investment is 1.52 times more volatile than Edgewell Personal Care. It trades about 0.14 of its potential returns per unit of risk. Edgewell Personal Care is currently generating about 0.17 per unit of risk. If you would invest 2,491 in MGIC Investment Corp on September 1, 2024 and sell it today you would earn a total of 135.00 from holding MGIC Investment Corp or generate 5.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGIC Investment Corp vs. Edgewell Personal Care
Performance |
| Timeline |
| MGIC Investment Corp |
| Edgewell Personal Care |
MGIC Investment and Edgewell Personal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and Edgewell Personal
The main advantage of trading using opposite MGIC Investment and Edgewell Personal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, Edgewell Personal 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 Edgewell Personal will offset losses from the drop in Edgewell Personal's long position.| MGIC Investment vs. MBIA Inc | MGIC Investment vs. Essent Group | MGIC Investment vs. Assured Guaranty | MGIC Investment vs. Employers Holdings |
| Edgewell Personal vs. Mannatech Incorporated | Edgewell Personal vs. Inter Parfums | Edgewell Personal vs. Nu Skin Enterprises | Edgewell Personal vs. Helen of Troy |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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