Correlation Between MGIC Investment and Grupo Simec
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and Grupo Simec 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 Grupo Simec 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 Grupo Simec SAB, you can compare the effects of market volatilities on MGIC Investment and Grupo Simec 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 Grupo Simec. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and Grupo Simec.
Diversification Opportunities for MGIC Investment and Grupo Simec
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between MGIC and Grupo is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and Grupo Simec SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Simec SAB 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 Grupo Simec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Simec SAB has no effect on the direction of MGIC Investment i.e., MGIC Investment and Grupo Simec go up and down completely randomly.
Pair Corralation between MGIC Investment and Grupo Simec
Considering the 90-day investment horizon MGIC Investment Corp is expected to generate 0.95 times more return on investment than Grupo Simec. However, MGIC Investment Corp is 1.05 times less risky than Grupo Simec. It trades about 0.1 of its potential returns per unit of risk. Grupo Simec SAB is currently generating about 0.05 per unit of risk. If you would invest 2,508 in MGIC Investment Corp on August 30, 2024 and sell it today you would earn a total of 103.00 from holding MGIC Investment Corp or generate 4.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
MGIC Investment Corp vs. Grupo Simec SAB
Performance |
| Timeline |
| MGIC Investment Corp |
| Grupo Simec SAB |
MGIC Investment and Grupo Simec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and Grupo Simec
The main advantage of trading using opposite MGIC Investment and Grupo Simec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, Grupo Simec 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 Grupo Simec will offset losses from the drop in Grupo Simec's long position.| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Essent Group | MGIC Investment vs. Assured Guaranty |
| Grupo Simec vs. Synalloy | Grupo Simec vs. Mesabi Trust | Grupo Simec vs. Algoma Steel Group | Grupo Simec vs. Olympic Steel |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |