Correlation Between Retail Estates and MGIC INVESTMENT
Can any of the company-specific risk be diversified away by investing in both Retail Estates and MGIC INVESTMENT 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 Retail Estates and MGIC INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Estates NV and MGIC INVESTMENT, you can compare the effects of market volatilities on Retail Estates and MGIC INVESTMENT 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 Retail Estates with a short position of MGIC INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Estates and MGIC INVESTMENT.
Diversification Opportunities for Retail Estates and MGIC INVESTMENT
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Retail and MGIC is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates NV and MGIC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGIC INVESTMENT and Retail Estates 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 Retail Estates NV are associated (or correlated) with MGIC INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGIC INVESTMENT has no effect on the direction of Retail Estates i.e., Retail Estates and MGIC INVESTMENT go up and down completely randomly.
Pair Corralation between Retail Estates and MGIC INVESTMENT
Assuming the 90 days horizon Retail Estates NV is expected to under-perform the MGIC INVESTMENT. But the stock apears to be less risky and, when comparing its historical volatility, Retail Estates NV is 1.57 times less risky than MGIC INVESTMENT. The stock trades about -0.32 of its potential returns per unit of risk. The MGIC INVESTMENT is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,307 in MGIC INVESTMENT on August 27, 2024 and sell it today you would earn a total of 73.00 from holding MGIC INVESTMENT or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Estates NV vs. MGIC INVESTMENT
Performance |
| Timeline |
| Retail Estates NV |
| MGIC INVESTMENT |
Retail Estates and MGIC INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Estates and MGIC INVESTMENT
The main advantage of trading using opposite Retail Estates and MGIC INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Estates position performs unexpectedly, MGIC INVESTMENT 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 MGIC INVESTMENT will offset losses from the drop in MGIC INVESTMENT's long position.| Retail Estates vs. Simon Property Group | Retail Estates vs. Vicinity Centres | Retail Estates vs. Superior Plus Corp | Retail Estates vs. NMI Holdings |
| MGIC INVESTMENT vs. Perdoceo Education | MGIC INVESTMENT vs. Ross Stores | MGIC INVESTMENT vs. Coor Service Management | MGIC INVESTMENT vs. Fast Retailing Co |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |