Correlation Between MGIC INVESTMENT and SEALED AIR
Can any of the company-specific risk be diversified away by investing in both MGIC INVESTMENT and SEALED AIR 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 SEALED AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC INVESTMENT and SEALED AIR , you can compare the effects of market volatilities on MGIC INVESTMENT and SEALED AIR 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 SEALED AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC INVESTMENT and SEALED AIR.
Diversification Opportunities for MGIC INVESTMENT and SEALED AIR
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MGIC and SEALED is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding MGIC INVESTMENT and SEALED AIR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEALED AIR 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 SEALED AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEALED AIR has no effect on the direction of MGIC INVESTMENT i.e., MGIC INVESTMENT and SEALED AIR go up and down completely randomly.
Pair Corralation between MGIC INVESTMENT and SEALED AIR
Assuming the 90 days trading horizon MGIC INVESTMENT is expected to generate 0.61 times more return on investment than SEALED AIR. However, MGIC INVESTMENT is 1.63 times less risky than SEALED AIR. It trades about 0.12 of its potential returns per unit of risk. SEALED AIR is currently generating about -0.03 per unit of risk. If you would invest 1,157 in MGIC INVESTMENT on October 4, 2024 and sell it today you would earn a total of 1,143 from holding MGIC INVESTMENT or generate 98.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
MGIC INVESTMENT vs. SEALED AIR
Performance |
Timeline |
MGIC INVESTMENT |
SEALED AIR |
MGIC INVESTMENT and SEALED AIR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MGIC INVESTMENT and SEALED AIR
The main advantage of trading using opposite MGIC INVESTMENT and SEALED AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC INVESTMENT position performs unexpectedly, SEALED AIR 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 SEALED AIR will offset losses from the drop in SEALED AIR's long position.MGIC INVESTMENT vs. COMMERCIAL VEHICLE | MGIC INVESTMENT vs. GEELY AUTOMOBILE | MGIC INVESTMENT vs. USWE SPORTS AB | MGIC INVESTMENT vs. PLAYTECH |
SEALED AIR vs. Easy Software AG | SEALED AIR vs. NetSol Technologies | SEALED AIR vs. GALENA MINING LTD | SEALED AIR vs. Stag Industrial |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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