Correlation Between MGIC INVESTMENT and GAMING FAC
Can any of the company-specific risk be diversified away by investing in both MGIC INVESTMENT and GAMING FAC 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 MGIC INVESTMENT and GAMING FAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC INVESTMENT and GAMING FAC SA, you can compare the effects of market volatilities on MGIC INVESTMENT and GAMING FAC 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 MGIC INVESTMENT with a short position of GAMING FAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC INVESTMENT and GAMING FAC.
Diversification Opportunities for MGIC INVESTMENT and GAMING FAC
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MGIC and GAMING is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding MGIC INVESTMENT and GAMING FAC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMING FAC SA and MGIC 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 MGIC INVESTMENT are associated (or correlated) with GAMING FAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMING FAC SA has no effect on the direction of MGIC INVESTMENT i.e., MGIC INVESTMENT and GAMING FAC go up and down completely randomly.
Pair Corralation between MGIC INVESTMENT and GAMING FAC
Assuming the 90 days trading horizon MGIC INVESTMENT is expected to generate 0.36 times more return on investment than GAMING FAC. However, MGIC INVESTMENT is 2.81 times less risky than GAMING FAC. It trades about 0.11 of its potential returns per unit of risk. GAMING FAC SA is currently generating about 0.03 per unit of risk. If you would invest 1,176 in MGIC INVESTMENT on September 26, 2024 and sell it today you would earn a total of 1,104 from holding MGIC INVESTMENT or generate 93.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
MGIC INVESTMENT vs. GAMING FAC SA
Performance |
Timeline |
MGIC INVESTMENT |
GAMING FAC SA |
MGIC INVESTMENT and GAMING FAC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MGIC INVESTMENT and GAMING FAC
The main advantage of trading using opposite MGIC INVESTMENT and GAMING FAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC INVESTMENT position performs unexpectedly, GAMING FAC 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 GAMING FAC will offset losses from the drop in GAMING FAC's long position.MGIC INVESTMENT vs. Apple Inc | MGIC INVESTMENT vs. Apple Inc | MGIC INVESTMENT vs. Microsoft | MGIC INVESTMENT vs. Microsoft |
GAMING FAC vs. MGIC INVESTMENT | GAMING FAC vs. SERI INDUSTRIAL EO | GAMING FAC vs. PennantPark Investment | GAMING FAC vs. SEI INVESTMENTS |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |