Correlation Between Aegean Airlines and MGIC Investment
Can any of the company-specific risk be diversified away by investing in both Aegean Airlines 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 Aegean Airlines and MGIC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aegean Airlines SA and MGIC Investment Corp, you can compare the effects of market volatilities on Aegean Airlines 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 Aegean Airlines with a short position of MGIC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aegean Airlines and MGIC Investment.
Diversification Opportunities for Aegean Airlines and MGIC Investment
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aegean and MGIC is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Aegean Airlines SA 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 Aegean Airlines 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 Aegean Airlines SA 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 Aegean Airlines i.e., Aegean Airlines and MGIC Investment go up and down completely randomly.
Pair Corralation between Aegean Airlines and MGIC Investment
Assuming the 90 days horizon Aegean Airlines SA is expected to generate 1.66 times more return on investment than MGIC Investment. However, Aegean Airlines is 1.66 times more volatile than MGIC Investment Corp. It trades about 0.08 of its potential returns per unit of risk. MGIC Investment Corp is currently generating about 0.1 per unit of risk. If you would invest 512.00 in Aegean Airlines SA on September 20, 2024 and sell it today you would earn a total of 573.00 from holding Aegean Airlines SA or generate 111.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Aegean Airlines SA vs. MGIC Investment Corp
Performance |
| Timeline |
| Aegean Airlines SA |
| MGIC Investment Corp |
Aegean Airlines and MGIC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aegean Airlines and MGIC Investment
The main advantage of trading using opposite Aegean Airlines and MGIC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aegean Airlines 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.| Aegean Airlines vs. Copa Holdings SA | Aegean Airlines vs. United Airlines Holdings | Aegean Airlines vs. Delta Air Lines | Aegean Airlines vs. SkyWest |
| MGIC Investment vs. Employers Holdings | MGIC Investment vs. James River Group | MGIC Investment vs. ICC Holdings | MGIC Investment vs. AMERISAFE |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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