Correlation Between MGIC Investment and Hudson Acquisition
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and Hudson Acquisition 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 Hudson Acquisition 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 Hudson Acquisition I, you can compare the effects of market volatilities on MGIC Investment and Hudson Acquisition 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 Hudson Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and Hudson Acquisition.
Diversification Opportunities for MGIC Investment and Hudson Acquisition
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MGIC and Hudson is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and Hudson Acquisition I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Acquisition 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 Hudson Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudson Acquisition has no effect on the direction of MGIC Investment i.e., MGIC Investment and Hudson Acquisition go up and down completely randomly.
Pair Corralation between MGIC Investment and Hudson Acquisition
If you would invest 2,369 in MGIC Investment Corp on October 28, 2024 and sell it today you would earn a total of 106.00 from holding MGIC Investment Corp or generate 4.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGIC Investment Corp vs. Hudson Acquisition I
Performance |
| Timeline |
| MGIC Investment Corp |
| Hudson Acquisition |
MGIC Investment and Hudson Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and Hudson Acquisition
The main advantage of trading using opposite MGIC Investment and Hudson Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, Hudson Acquisition 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 Hudson Acquisition will offset losses from the drop in Hudson Acquisition's long position.| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Essent Group | MGIC Investment vs. Assured Guaranty |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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