Correlation Between MGIC Investment and Lazard
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and Lazard 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 Lazard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MGIC Investment Corp and Lazard, you can compare the effects of market volatilities on MGIC Investment and Lazard 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 Lazard. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and Lazard.
Diversification Opportunities for MGIC Investment and Lazard
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MGIC and Lazard is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and Lazard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lazard 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 Corp are associated (or correlated) with Lazard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lazard has no effect on the direction of MGIC Investment i.e., MGIC Investment and Lazard go up and down completely randomly.
Pair Corralation between MGIC Investment and Lazard
Considering the 90-day investment horizon MGIC Investment is expected to generate 1.34 times less return on investment than Lazard. But when comparing it to its historical volatility, MGIC Investment Corp is 1.57 times less risky than Lazard. It trades about 0.07 of its potential returns per unit of risk. Lazard is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,734 in Lazard on December 2, 2024 and sell it today you would earn a total of 1,281 from holding Lazard or generate 34.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
MGIC Investment Corp vs. Lazard
Performance |
Timeline |
MGIC Investment Corp |
Lazard |
MGIC Investment and Lazard Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MGIC Investment and Lazard
The main advantage of trading using opposite MGIC Investment and Lazard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, Lazard 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 Lazard will offset losses from the drop in Lazard's long position.MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Essent Group | MGIC Investment vs. Assured Guaranty |
Lazard vs. PJT Partners | Lazard vs. Moelis Co | Lazard vs. Houlihan Lokey | Lazard vs. Piper Sandler Companies |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data |