Correlation Between Sezzle Common and MGIC Investment
Can any of the company-specific risk be diversified away by investing in both Sezzle Common 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 Sezzle Common and MGIC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sezzle Common Stock and MGIC Investment Corp, you can compare the effects of market volatilities on Sezzle Common 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 Sezzle Common with a short position of MGIC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sezzle Common and MGIC Investment.
Diversification Opportunities for Sezzle Common and MGIC Investment
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sezzle and MGIC is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sezzle Common Stock 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 Sezzle Common 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 Sezzle Common Stock 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 Sezzle Common i.e., Sezzle Common and MGIC Investment go up and down completely randomly.
Pair Corralation between Sezzle Common and MGIC Investment
Given the investment horizon of 90 days Sezzle Common Stock is expected to under-perform the MGIC Investment. In addition to that, Sezzle Common is 4.75 times more volatile than MGIC Investment Corp. It trades about -0.17 of its total potential returns per unit of risk. MGIC Investment Corp is currently generating about -0.04 per unit of volatility. If you would invest 2,491 in MGIC Investment Corp on September 12, 2024 and sell it today you would lose (34.00) from holding MGIC Investment Corp or give up 1.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sezzle Common Stock vs. MGIC Investment Corp
Performance |
| Timeline |
| Sezzle Common Stock |
| MGIC Investment Corp |
Sezzle Common and MGIC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sezzle Common and MGIC Investment
The main advantage of trading using opposite Sezzle Common and MGIC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sezzle Common 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.| Sezzle Common vs. MGIC Investment Corp | Sezzle Common vs. Fidus Investment Corp | Sezzle Common vs. Western Asset Investment | Sezzle Common vs. The Wendys Co |
| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Essent Group | MGIC Investment vs. Assured Guaranty |
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 Stocks Directory module to find actively traded stocks across global markets.
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