Correlation Between CITIGROUP and MGIC Investment
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By analyzing existing cross correlation between CITIGROUP INC and MGIC Investment Corp, you can compare the effects of market volatilities on CITIGROUP 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 CITIGROUP with a short position of MGIC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITIGROUP and MGIC Investment.
Diversification Opportunities for CITIGROUP and MGIC Investment
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CITIGROUP and MGIC is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding CITIGROUP INC and MGIC Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGIC Investment Corp and CITIGROUP 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 CITIGROUP INC 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 Corp has no effect on the direction of CITIGROUP i.e., CITIGROUP and MGIC Investment go up and down completely randomly.
Pair Corralation between CITIGROUP and MGIC Investment
Assuming the 90 days trading horizon CITIGROUP INC is expected to generate 0.32 times more return on investment than MGIC Investment. However, CITIGROUP INC is 3.13 times less risky than MGIC Investment. It trades about -0.13 of its potential returns per unit of risk. MGIC Investment Corp is currently generating about -0.09 per unit of risk. If you would invest 9,585 in CITIGROUP INC on December 5, 2024 and sell it today you would lose (349.00) from holding CITIGROUP INC or give up 3.64% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 96.72% |
Values | Daily Returns |
CITIGROUP INC vs. MGIC Investment Corp
Performance |
Timeline |
CITIGROUP INC |
MGIC Investment Corp |
CITIGROUP and MGIC Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CITIGROUP and MGIC Investment
The main advantage of trading using opposite CITIGROUP and MGIC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITIGROUP 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.CITIGROUP vs. AEP TEX INC | CITIGROUP vs. iShares Global Consumer | CITIGROUP vs. Caterpillar | CITIGROUP vs. 3M Company |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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