Correlation Between MGIC INVESTMENT and QINGCI GAMES

Can any of the company-specific risk be diversified away by investing in both MGIC INVESTMENT and QINGCI GAMES 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 QINGCI GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MGIC INVESTMENT and QINGCI GAMES INC, you can compare the effects of market volatilities on MGIC INVESTMENT and QINGCI GAMES 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 QINGCI GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC INVESTMENT and QINGCI GAMES.

Diversification Opportunities for MGIC INVESTMENT and QINGCI GAMES

0.16

Correlation Coefficient

MGIC INVESTMENT  QINGCI GAMES

Average diversification

The 3 months correlation between MGIC and QINGCI is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding MGIC INVESTMENT and QINGCI GAMES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QINGCI GAMES INC 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 QINGCI GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QINGCI GAMES INC has no effect on the direction of MGIC INVESTMENT i.e., MGIC INVESTMENT and QINGCI GAMES go up and down completely randomly.

Pair Corralation between MGIC INVESTMENT and QINGCI GAMES

Assuming the 90 days trading horizon MGIC INVESTMENT is expected to generate 0.46 times more return on investment than QINGCI GAMES. However, MGIC INVESTMENT is 2.16 times less risky than QINGCI GAMES. It trades about 0.12 of its potential returns per unit of risk. QINGCI GAMES INC is currently generating about 0.01 per unit of risk. If you would invest  2,247  in MGIC INVESTMENT on September 4, 2024 and sell it today you would earn a total of  233.00  from holding MGIC INVESTMENT or generate 10.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

MGIC INVESTMENT  vs.  QINGCI GAMES INC

MGIC INVESTMENT

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MGIC INVESTMENT are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady fundamental indicators, MGIC INVESTMENT may actually be approaching a critical reversion point that can send shares even higher in January 2025.

QINGCI GAMES INC

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in QINGCI GAMES INC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, QINGCI GAMES is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with MGIC INVESTMENT and QINGCI GAMES

The main advantage of trading using opposite MGIC INVESTMENT and QINGCI GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC INVESTMENT position performs unexpectedly, QINGCI GAMES 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 QINGCI GAMES will offset losses from the drop in QINGCI GAMES's long position.

The idea behind MGIC INVESTMENT and QINGCI GAMES INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.