Correlation Between Where Food and MGIC Investment
Can any of the company-specific risk be diversified away by investing in both Where Food 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 Where Food and MGIC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Where Food Comes and MGIC Investment Corp, you can compare the effects of market volatilities on Where Food 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 Where Food with a short position of MGIC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Where Food and MGIC Investment.
Diversification Opportunities for Where Food and MGIC Investment
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Where and MGIC is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Where Food Comes 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 Where Food 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 Where Food Comes 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 Where Food i.e., Where Food and MGIC Investment go up and down completely randomly.
Pair Corralation between Where Food and MGIC Investment
Given the investment horizon of 90 days Where Food Comes is expected to generate 0.6 times more return on investment than MGIC Investment. However, Where Food Comes is 1.67 times less risky than MGIC Investment. It trades about 0.4 of its potential returns per unit of risk. MGIC Investment Corp is currently generating about 0.14 per unit of risk. If you would invest 1,100 in Where Food Comes on September 1, 2024 and sell it today you would earn a total of 111.00 from holding Where Food Comes or generate 10.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Where Food Comes vs. MGIC Investment Corp
Performance |
| Timeline |
| Where Food Comes |
| MGIC Investment Corp |
Where Food and MGIC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Where Food and MGIC Investment
The main advantage of trading using opposite Where Food and MGIC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Where Food 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.| Where Food vs. Ke Holdings | Where Food vs. nCino Inc | Where Food vs. Kingsoft Cloud Holdings | Where Food vs. Jfrog |
| MGIC Investment vs. MBIA Inc | MGIC Investment vs. Essent Group | MGIC Investment vs. Assured Guaranty | MGIC Investment vs. Employers Holdings |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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