Correlation Between Sealed Air and MGIC Investment
Can any of the company-specific risk be diversified away by investing in both Sealed Air 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 Sealed Air and MGIC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sealed Air and MGIC Investment Corp, you can compare the effects of market volatilities on Sealed Air 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 Sealed Air with a short position of MGIC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sealed Air and MGIC Investment.
Diversification Opportunities for Sealed Air and MGIC Investment
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sealed and MGIC is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sealed Air and MGIC Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGIC Investment Corp and Sealed Air 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 Sealed Air 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 Corp has no effect on the direction of Sealed Air i.e., Sealed Air and MGIC Investment go up and down completely randomly.
Pair Corralation between Sealed Air and MGIC Investment
Considering the 90-day investment horizon Sealed Air is expected to generate 1.12 times less return on investment than MGIC Investment. In addition to that, Sealed Air is 1.02 times more volatile than MGIC Investment Corp. It trades about 0.05 of its total potential returns per unit of risk. MGIC Investment Corp is currently generating about 0.06 per unit of volatility. If you would invest 2,489 in MGIC Investment Corp on September 2, 2024 and sell it today you would earn a total of 137.00 from holding MGIC Investment Corp or generate 5.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sealed Air vs. MGIC Investment Corp
Performance |
| Timeline |
| Sealed Air |
| MGIC Investment Corp |
Sealed Air and MGIC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sealed Air and MGIC Investment
The main advantage of trading using opposite Sealed Air and MGIC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sealed Air 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.| Sealed Air vs. Avery Dennison Corp | Sealed Air vs. International Paper | Sealed Air vs. Sonoco Products | Sealed Air vs. Packaging Corp of |
| MGIC Investment vs. MBIA Inc | MGIC Investment vs. Assured Guaranty | MGIC Investment vs. Employers Holdings | MGIC Investment vs. James River Group |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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