Correlation Between MGIC Investment and SunOpta
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and SunOpta 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 SunOpta 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 SunOpta, you can compare the effects of market volatilities on MGIC Investment and SunOpta 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 SunOpta. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and SunOpta.
Diversification Opportunities for MGIC Investment and SunOpta
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between MGIC and SunOpta is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta 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 SunOpta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunOpta has no effect on the direction of MGIC Investment i.e., MGIC Investment and SunOpta go up and down completely randomly.
Pair Corralation between MGIC Investment and SunOpta
Considering the 90-day investment horizon MGIC Investment Corp is expected to under-perform the SunOpta. But the stock apears to be less risky and, when comparing its historical volatility, MGIC Investment Corp is 1.46 times less risky than SunOpta. The stock trades about -0.28 of its potential returns per unit of risk. The SunOpta is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 747.00 in SunOpta on November 27, 2024 and sell it today you would lose (23.00) from holding SunOpta or give up 3.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGIC Investment Corp vs. SunOpta
Performance |
| Timeline |
| MGIC Investment Corp |
| SunOpta |
MGIC Investment and SunOpta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and SunOpta
The main advantage of trading using opposite MGIC Investment and SunOpta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, SunOpta 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 SunOpta will offset losses from the drop in SunOpta's long position.| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Essent Group | MGIC Investment vs. Assured Guaranty |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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