Correlation Between MGIC Investment and GEN Restaurant
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and GEN Restaurant 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 GEN Restaurant 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 GEN Restaurant Group,, you can compare the effects of market volatilities on MGIC Investment and GEN Restaurant 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 GEN Restaurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and GEN Restaurant.
Diversification Opportunities for MGIC Investment and GEN Restaurant
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MGIC and GEN is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and GEN Restaurant Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEN Restaurant Group, 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 GEN Restaurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEN Restaurant Group, has no effect on the direction of MGIC Investment i.e., MGIC Investment and GEN Restaurant go up and down completely randomly.
Pair Corralation between MGIC Investment and GEN Restaurant
Considering the 90-day investment horizon MGIC Investment Corp is expected to generate 0.4 times more return on investment than GEN Restaurant. However, MGIC Investment Corp is 2.5 times less risky than GEN Restaurant. It trades about 0.06 of its potential returns per unit of risk. GEN Restaurant Group, is currently generating about -0.01 per unit of risk. If you would invest 2,489 in MGIC Investment Corp on August 31, 2024 and sell it today you would earn a total of 122.00 from holding MGIC Investment Corp or generate 4.9% 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. GEN Restaurant Group,
Performance |
| Timeline |
| MGIC Investment Corp |
| GEN Restaurant Group, |
MGIC Investment and GEN Restaurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and GEN Restaurant
The main advantage of trading using opposite MGIC Investment and GEN Restaurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, GEN Restaurant 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 GEN Restaurant will offset losses from the drop in GEN Restaurant's long position.| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Essent Group | MGIC Investment vs. Assured Guaranty |
| GEN Restaurant vs. Wingstop | GEN Restaurant vs. The Wendys Co | GEN Restaurant vs. RLJ Lodging Trust | GEN Restaurant 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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