Correlation Between MGIC Investment and Fidus Investment
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and Fidus 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 Fidus 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 Fidus Investment Corp, you can compare the effects of market volatilities on MGIC Investment and Fidus 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 Fidus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and Fidus Investment.
Diversification Opportunities for MGIC Investment and Fidus Investment
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MGIC and Fidus is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and Fidus Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidus Investment Corp 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 Fidus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidus Investment Corp has no effect on the direction of MGIC Investment i.e., MGIC Investment and Fidus Investment go up and down completely randomly.
Pair Corralation between MGIC Investment and Fidus Investment
Considering the 90-day investment horizon MGIC Investment Corp is expected to generate 1.51 times more return on investment than Fidus Investment. However, MGIC Investment is 1.51 times more volatile than Fidus Investment Corp. It trades about 0.11 of its potential returns per unit of risk. Fidus Investment Corp is currently generating about 0.06 per unit of risk. If you would invest 1,312 in MGIC Investment Corp on August 27, 2024 and sell it today you would earn a total of 1,238 from holding MGIC Investment Corp or generate 94.36% 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. Fidus Investment Corp
Performance |
| Timeline |
| MGIC Investment Corp |
| Fidus Investment Corp |
MGIC Investment and Fidus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and Fidus Investment
The main advantage of trading using opposite MGIC Investment and Fidus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, Fidus 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 Fidus Investment will offset losses from the drop in Fidus Investment's long position.| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Essent Group | MGIC Investment vs. Assured Guaranty |
| Fidus Investment vs. PowerUp Acquisition Corp | Fidus Investment vs. Aurora Innovation | Fidus Investment vs. HUMANA INC | Fidus Investment vs. Aquagold International |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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