Correlation Between MGIC Investment and Pear Therapeutics
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and Pear Therapeutics 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 Pear Therapeutics 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 Pear Therapeutics, you can compare the effects of market volatilities on MGIC Investment and Pear Therapeutics 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 Pear Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and Pear Therapeutics.
Diversification Opportunities for MGIC Investment and Pear Therapeutics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MGIC and Pear is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and Pear Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pear Therapeutics 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 Pear Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pear Therapeutics has no effect on the direction of MGIC Investment i.e., MGIC Investment and Pear Therapeutics go up and down completely randomly.
Pair Corralation between MGIC Investment and Pear Therapeutics
If you would invest 1,255 in MGIC Investment Corp on September 3, 2024 and sell it today you would earn a total of 1,348 from holding MGIC Investment Corp or generate 107.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
MGIC Investment Corp vs. Pear Therapeutics
Performance |
| Timeline |
| MGIC Investment Corp |
| Pear Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
MGIC Investment and Pear Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and Pear Therapeutics
The main advantage of trading using opposite MGIC Investment and Pear Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, Pear Therapeutics 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 Pear Therapeutics will offset losses from the drop in Pear Therapeutics' long position.| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Essent Group | MGIC Investment vs. Assured Guaranty |
| Pear Therapeutics vs. Marchex | Pear Therapeutics vs. Boston Beer | Pear Therapeutics vs. Willamette Valley Vineyards | Pear Therapeutics vs. Dolphin Entertainment |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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