Correlation Between MGIC INVESTMENT and QURATE RETAIL

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

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

Diversification Opportunities for MGIC INVESTMENT and QURATE RETAIL

-0.41

Correlation Coefficient

MGIC INVESTMENT  QURATE RETAIL

Very good diversification

The 3 months correlation between MGIC and QURATE is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding MGIC INVESTMENT and QURATE RETAIL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QURATE RETAIL 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 QURATE RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QURATE RETAIL INC has no effect on the direction of MGIC INVESTMENT i.e., MGIC INVESTMENT and QURATE RETAIL go up and down completely randomly.

Pair Corralation between MGIC INVESTMENT and QURATE RETAIL

Assuming the 90 days trading horizon MGIC INVESTMENT is expected to generate 60.22 times less return on investment than QURATE RETAIL. But when comparing it to its historical volatility, MGIC INVESTMENT is 3.09 times less risky than QURATE RETAIL. It trades about 0.01 of its potential returns per unit of risk. QURATE RETAIL INC is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  300.00  in QURATE RETAIL INC on September 13, 2024 and sell it today you would earn a total of  24.00  from holding QURATE RETAIL INC or generate 8.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

MGIC INVESTMENT  vs.  QURATE RETAIL INC

MGIC INVESTMENT

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MGIC INVESTMENT are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, MGIC INVESTMENT may actually be approaching a critical reversion point that can send shares even higher in January 2025.

QURATE RETAIL INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days QURATE RETAIL INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, QURATE RETAIL 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 QURATE RETAIL

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

The idea behind MGIC INVESTMENT and QURATE RETAIL 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.