Correlation Between MGIC Investment and Solvay Bank
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and Solvay Bank 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 Solvay Bank 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 Solvay Bank Corp, you can compare the effects of market volatilities on MGIC Investment and Solvay Bank 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 Solvay Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and Solvay Bank.
Diversification Opportunities for MGIC Investment and Solvay Bank
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MGIC and Solvay is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and Solvay Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solvay Bank Corp 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 Solvay Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solvay Bank Corp has no effect on the direction of MGIC Investment i.e., MGIC Investment and Solvay Bank go up and down completely randomly.
Pair Corralation between MGIC Investment and Solvay Bank
Considering the 90-day investment horizon MGIC Investment Corp is expected to generate 0.67 times more return on investment than Solvay Bank. However, MGIC Investment Corp is 1.49 times less risky than Solvay Bank. It trades about 0.07 of its potential returns per unit of risk. Solvay Bank Corp is currently generating about 0.05 per unit of risk. If you would invest 2,294 in MGIC Investment Corp on September 3, 2025 and sell it today you would earn a total of 559.00 from holding MGIC Investment Corp or generate 24.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGIC Investment Corp vs. Solvay Bank Corp
Performance |
| Timeline |
| MGIC Investment Corp |
| Solvay Bank Corp |
MGIC Investment and Solvay Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and Solvay Bank
The main advantage of trading using opposite MGIC Investment and Solvay Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, Solvay Bank 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 Solvay Bank will offset losses from the drop in Solvay Bank's long position.| MGIC Investment vs. Walker Dunlop | MGIC Investment vs. Essent Group | MGIC Investment vs. Waterstone Financial | MGIC Investment vs. Federal Agricultural Mortgage |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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