Correlation Between MGIC Investment and Mitsubishi Chemical
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and Mitsubishi Chemical 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 Mitsubishi Chemical 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 Mitsubishi Chemical Holdings, you can compare the effects of market volatilities on MGIC Investment and Mitsubishi Chemical 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 Mitsubishi Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and Mitsubishi Chemical.
Diversification Opportunities for MGIC Investment and Mitsubishi Chemical
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between MGIC and Mitsubishi is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and Mitsubishi Chemical Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsubishi Chemical 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 Mitsubishi Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsubishi Chemical has no effect on the direction of MGIC Investment i.e., MGIC Investment and Mitsubishi Chemical go up and down completely randomly.
Pair Corralation between MGIC Investment and Mitsubishi Chemical
Considering the 90-day investment horizon MGIC Investment Corp is expected to generate 0.48 times more return on investment than Mitsubishi Chemical. However, MGIC Investment Corp is 2.06 times less risky than Mitsubishi Chemical. It trades about 0.09 of its potential returns per unit of risk. Mitsubishi Chemical Holdings is currently generating about 0.0 per unit of risk. If you would invest 1,652 in MGIC Investment Corp on September 12, 2024 and sell it today you would earn a total of 831.00 from holding MGIC Investment Corp or generate 50.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 52.27% |
| Values | Daily Returns |
MGIC Investment Corp vs. Mitsubishi Chemical Holdings
Performance |
| Timeline |
| MGIC Investment Corp |
| Mitsubishi Chemical |
MGIC Investment and Mitsubishi Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and Mitsubishi Chemical
The main advantage of trading using opposite MGIC Investment and Mitsubishi Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, Mitsubishi Chemical 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 Mitsubishi Chemical will offset losses from the drop in Mitsubishi Chemical's long position.| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Essent Group | MGIC Investment vs. Assured Guaranty |
| Mitsubishi Chemical vs. Old Republic International | Mitsubishi Chemical vs. The Hanover Insurance | Mitsubishi Chemical vs. Siriuspoint | Mitsubishi Chemical vs. MGIC Investment Corp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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