Correlation Between MGIC Investment and Very Good
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and Very Good 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 Very Good 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 The Very Good, you can compare the effects of market volatilities on MGIC Investment and Very Good 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 Very Good. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and Very Good.
Diversification Opportunities for MGIC Investment and Very Good
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MGIC and Very is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and The Very Good in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Very Good 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 Very Good. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Very Good has no effect on the direction of MGIC Investment i.e., MGIC Investment and Very Good go up and down completely randomly.
Pair Corralation between MGIC Investment and Very Good
If you would invest 2,469 in MGIC Investment Corp on September 14, 2024 and sell it today you would earn a total of 17.00 from holding MGIC Investment Corp or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
MGIC Investment Corp vs. The Very Good
Performance |
| Timeline |
| MGIC Investment Corp |
| Very Good |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
MGIC Investment and Very Good Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and Very Good
The main advantage of trading using opposite MGIC Investment and Very Good positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, Very Good 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 Very Good will offset losses from the drop in Very Good's long position.| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Essent Group | MGIC Investment vs. Assured Guaranty |
| Very Good vs. MGIC Investment Corp | Very Good vs. Comstock Holding Companies | Very Good vs. United Parks Resorts | Very Good vs. Hasbro Inc |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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