Correlation Between MGIC Investment and Univest Pennsylvania
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and Univest Pennsylvania 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 Univest Pennsylvania 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 Univest Pennsylvania, you can compare the effects of market volatilities on MGIC Investment and Univest Pennsylvania 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 Univest Pennsylvania. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and Univest Pennsylvania.
Diversification Opportunities for MGIC Investment and Univest Pennsylvania
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MGIC and Univest is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and Univest Pennsylvania in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univest Pennsylvania 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 Univest Pennsylvania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univest Pennsylvania has no effect on the direction of MGIC Investment i.e., MGIC Investment and Univest Pennsylvania go up and down completely randomly.
Pair Corralation between MGIC Investment and Univest Pennsylvania
Considering the 90-day investment horizon MGIC Investment is expected to generate 1.23 times less return on investment than Univest Pennsylvania. But when comparing it to its historical volatility, MGIC Investment Corp is 1.57 times less risky than Univest Pennsylvania. It trades about 0.12 of its potential returns per unit of risk. Univest Pennsylvania is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,583 in Univest Pennsylvania on August 31, 2024 and sell it today you would earn a total of 1,615 from holding Univest Pennsylvania or generate 102.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGIC Investment Corp vs. Univest Pennsylvania
Performance |
| Timeline |
| MGIC Investment Corp |
| Univest Pennsylvania |
MGIC Investment and Univest Pennsylvania Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and Univest Pennsylvania
The main advantage of trading using opposite MGIC Investment and Univest Pennsylvania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, Univest Pennsylvania 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 Univest Pennsylvania will offset losses from the drop in Univest Pennsylvania's long position.| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Essent Group | MGIC Investment vs. Employers Holdings |
| Univest Pennsylvania vs. Waterstone Financial | Univest Pennsylvania vs. Mid Penn Bancorp | Univest Pennsylvania vs. ST Bancorp | Univest Pennsylvania vs. Republic Bancorp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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