Correlation Between Trisura Group and MGIC Investment
Can any of the company-specific risk be diversified away by investing in both Trisura Group and MGIC Investment 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 Trisura Group and MGIC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trisura Group and MGIC Investment, you can compare the effects of market volatilities on Trisura Group and MGIC Investment 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 Trisura Group with a short position of MGIC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trisura Group and MGIC Investment.
Diversification Opportunities for Trisura Group and MGIC Investment
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Trisura and MGIC is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Trisura Group and MGIC Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGIC Investment and Trisura Group 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 Trisura Group are associated (or correlated) with MGIC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGIC Investment has no effect on the direction of Trisura Group i.e., Trisura Group and MGIC Investment go up and down completely randomly.
Pair Corralation between Trisura Group and MGIC Investment
Assuming the 90 days trading horizon Trisura Group is expected to generate 1.92 times more return on investment than MGIC Investment. However, Trisura Group is 1.92 times more volatile than MGIC Investment. It trades about 0.12 of its potential returns per unit of risk. MGIC Investment is currently generating about -0.12 per unit of risk. If you would invest 2,180 in Trisura Group on December 5, 2024 and sell it today you would earn a total of 140.00 from holding Trisura Group or generate 6.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Trisura Group vs. MGIC Investment
Performance |
Timeline |
Trisura Group |
MGIC Investment |
Trisura Group and MGIC Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Trisura Group and MGIC Investment
The main advantage of trading using opposite Trisura Group and MGIC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trisura Group position performs unexpectedly, MGIC Investment 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 MGIC Investment will offset losses from the drop in MGIC Investment's long position.Trisura Group vs. GBS Software AG | Trisura Group vs. ARDAGH METAL PACDL 0001 | Trisura Group vs. ITALIAN WINE BRANDS | Trisura Group vs. Ringmetall SE |
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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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