Correlation Between MGIC Investment and Lakeside Holding
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and Lakeside Holding 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 Lakeside Holding 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 Lakeside Holding Limited, you can compare the effects of market volatilities on MGIC Investment and Lakeside Holding 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 Lakeside Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and Lakeside Holding.
Diversification Opportunities for MGIC Investment and Lakeside Holding
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MGIC and Lakeside is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and Lakeside Holding Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lakeside Holding 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 Lakeside Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lakeside Holding has no effect on the direction of MGIC Investment i.e., MGIC Investment and Lakeside Holding go up and down completely randomly.
Pair Corralation between MGIC Investment and Lakeside Holding
Considering the 90-day investment horizon MGIC Investment Corp is expected to generate 0.13 times more return on investment than Lakeside Holding. However, MGIC Investment Corp is 7.71 times less risky than Lakeside Holding. It trades about -0.01 of its potential returns per unit of risk. Lakeside Holding Limited is currently generating about -0.05 per unit of risk. If you would invest 2,495 in MGIC Investment Corp on September 13, 2024 and sell it today you would lose (9.00) from holding MGIC Investment Corp or give up 0.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGIC Investment Corp vs. Lakeside Holding Limited
Performance |
| Timeline |
| MGIC Investment Corp |
| Lakeside Holding |
MGIC Investment and Lakeside Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and Lakeside Holding
The main advantage of trading using opposite MGIC Investment and Lakeside Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, Lakeside Holding 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 Lakeside Holding will offset losses from the drop in Lakeside Holding's long position.| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Essent Group | MGIC Investment vs. Assured Guaranty |
| Lakeside Holding vs. Antero Midstream Partners | Lakeside Holding vs. Summit Midstream | Lakeside Holding vs. Reservoir Media | Lakeside Holding vs. Freedom Internet Group |
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 CEOs Directory module to screen CEOs from public companies around the world.
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