Correlation Between Virtus Investment and MGIC INVESTMENT
Can any of the company-specific risk be diversified away by investing in both Virtus Investment 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 Virtus Investment and MGIC INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Investment Partners and MGIC INVESTMENT, you can compare the effects of market volatilities on Virtus Investment 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 Virtus Investment with a short position of MGIC INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Investment and MGIC INVESTMENT.
Diversification Opportunities for Virtus Investment and MGIC INVESTMENT
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Virtus and MGIC is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Investment Partners and MGIC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGIC INVESTMENT and Virtus 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 Virtus Investment Partners 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 Virtus Investment i.e., Virtus Investment and MGIC INVESTMENT go up and down completely randomly.
Pair Corralation between Virtus Investment and MGIC INVESTMENT
Assuming the 90 days horizon Virtus Investment is expected to generate 13.7 times less return on investment than MGIC INVESTMENT. In addition to that, Virtus Investment is 1.49 times more volatile than MGIC INVESTMENT. It trades about 0.01 of its total potential returns per unit of risk. MGIC INVESTMENT is currently generating about 0.11 per unit of volatility. If you would invest 1,767 in MGIC INVESTMENT on November 3, 2024 and sell it today you would earn a total of 713.00 from holding MGIC INVESTMENT or generate 40.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Investment Partners vs. MGIC INVESTMENT
Performance |
| Timeline |
| Virtus Investment |
| MGIC INVESTMENT |
Virtus Investment and MGIC INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Investment and MGIC INVESTMENT
The main advantage of trading using opposite Virtus Investment and MGIC INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Investment 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.| Virtus Investment vs. SILVER BULLET DATA | Virtus Investment vs. Diamyd Medical AB | Virtus Investment vs. Teradata Corp | Virtus Investment vs. Alliance Data Systems |
| MGIC INVESTMENT vs. Reinsurance Group of | MGIC INVESTMENT vs. SIDETRADE EO 1 | MGIC INVESTMENT vs. Zurich Insurance Group | MGIC INVESTMENT vs. Salesforce |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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