Correlation Between Semtech and MGIC Investment
Can any of the company-specific risk be diversified away by investing in both Semtech 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 Semtech and MGIC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Semtech and MGIC Investment Corp, you can compare the effects of market volatilities on Semtech 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 Semtech with a short position of MGIC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Semtech and MGIC Investment.
Diversification Opportunities for Semtech and MGIC Investment
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Semtech and MGIC is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Semtech 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 Semtech 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 Semtech 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 Semtech i.e., Semtech and MGIC Investment go up and down completely randomly.
Pair Corralation between Semtech and MGIC Investment
Given the investment horizon of 90 days Semtech is expected to under-perform the MGIC Investment. In addition to that, Semtech is 7.31 times more volatile than MGIC Investment Corp. It trades about -0.21 of its total potential returns per unit of risk. MGIC Investment Corp is currently generating about -0.22 per unit of volatility. If you would invest 2,545 in MGIC Investment Corp on November 28, 2024 and sell it today you would lose (136.00) from holding MGIC Investment Corp or give up 5.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Semtech vs. MGIC Investment Corp
Performance |
| Timeline |
| Semtech |
| MGIC Investment Corp |
Semtech and MGIC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Semtech and MGIC Investment
The main advantage of trading using opposite Semtech and MGIC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Semtech 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.| Semtech vs. Power Integrations | Semtech vs. Diodes Incorporated | Semtech vs. MACOM Technology Solutions | Semtech vs. Cirrus Logic |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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