Correlation Between SOFI TECHNOLOGIES and MGIC INVESTMENT
Can any of the company-specific risk be diversified away by investing in both SOFI TECHNOLOGIES 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 SOFI TECHNOLOGIES and MGIC INVESTMENT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOFI TECHNOLOGIES and MGIC INVESTMENT, you can compare the effects of market volatilities on SOFI TECHNOLOGIES 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 SOFI TECHNOLOGIES with a short position of MGIC INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOFI TECHNOLOGIES and MGIC INVESTMENT.
Diversification Opportunities for SOFI TECHNOLOGIES and MGIC INVESTMENT
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SOFI and MGIC is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding SOFI TECHNOLOGIES and MGIC INVESTMENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGIC INVESTMENT and SOFI TECHNOLOGIES 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 SOFI TECHNOLOGIES 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 SOFI TECHNOLOGIES i.e., SOFI TECHNOLOGIES and MGIC INVESTMENT go up and down completely randomly.
Pair Corralation between SOFI TECHNOLOGIES and MGIC INVESTMENT
Assuming the 90 days horizon SOFI TECHNOLOGIES is expected to generate 2.61 times more return on investment than MGIC INVESTMENT. However, SOFI TECHNOLOGIES is 2.61 times more volatile than MGIC INVESTMENT. It trades about 0.35 of its potential returns per unit of risk. MGIC INVESTMENT is currently generating about 0.02 per unit of risk. If you would invest 691.00 in SOFI TECHNOLOGIES on September 25, 2024 and sell it today you would earn a total of 790.00 from holding SOFI TECHNOLOGIES or generate 114.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SOFI TECHNOLOGIES vs. MGIC INVESTMENT
Performance |
Timeline |
SOFI TECHNOLOGIES |
MGIC INVESTMENT |
SOFI TECHNOLOGIES and MGIC INVESTMENT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SOFI TECHNOLOGIES and MGIC INVESTMENT
The main advantage of trading using opposite SOFI TECHNOLOGIES and MGIC INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOFI TECHNOLOGIES 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.SOFI TECHNOLOGIES vs. Apple Inc | SOFI TECHNOLOGIES vs. Apple Inc | SOFI TECHNOLOGIES vs. Apple Inc | SOFI TECHNOLOGIES vs. Apple Inc |
MGIC INVESTMENT vs. SOFI TECHNOLOGIES | MGIC INVESTMENT vs. FARO Technologies | MGIC INVESTMENT vs. THORNEY TECHS LTD | MGIC INVESTMENT vs. Zoom Video Communications |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
FinTech Suite Use AI to screen and filter profitable investment opportunities |