Correlation Between MGIC Investment and EBRO FOODS
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and EBRO FOODS 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 EBRO FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC Investment and EBRO FOODS, you can compare the effects of market volatilities on MGIC Investment and EBRO FOODS 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 EBRO FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and EBRO FOODS.
Diversification Opportunities for MGIC Investment and EBRO FOODS
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between MGIC and EBRO is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment and EBRO FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBRO FOODS 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 EBRO FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBRO FOODS has no effect on the direction of MGIC Investment i.e., MGIC Investment and EBRO FOODS go up and down completely randomly.
Pair Corralation between MGIC Investment and EBRO FOODS
Assuming the 90 days horizon MGIC Investment is expected to generate 1.03 times more return on investment than EBRO FOODS. However, MGIC Investment is 1.03 times more volatile than EBRO FOODS. It trades about 0.08 of its potential returns per unit of risk. EBRO FOODS is currently generating about 0.01 per unit of risk. If you would invest 1,574 in MGIC Investment on December 5, 2024 and sell it today you would earn a total of 746.00 from holding MGIC Investment or generate 47.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
MGIC Investment vs. EBRO FOODS
Performance |
Timeline |
MGIC Investment |
EBRO FOODS |
MGIC Investment and EBRO FOODS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MGIC Investment and EBRO FOODS
The main advantage of trading using opposite MGIC Investment and EBRO FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, EBRO FOODS 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 EBRO FOODS will offset losses from the drop in EBRO FOODS's long position.MGIC Investment vs. EVS Broadcast Equipment | MGIC Investment vs. SOFI TECHNOLOGIES | MGIC Investment vs. Uber Technologies | MGIC Investment vs. ACCSYS TECHPLC EO |
EBRO FOODS vs. Collins Foods Limited | EBRO FOODS vs. Moneysupermarket Group PLC | EBRO FOODS vs. PLAYWAY SA ZY 10 | EBRO FOODS vs. Fevertree Drinks PLC |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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