Correlation Between Assurant and MGIC Investment
Can any of the company-specific risk be diversified away by investing in both Assurant 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 Assurant and MGIC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Assurant and MGIC Investment Corp, you can compare the effects of market volatilities on Assurant 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 Assurant with a short position of MGIC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assurant and MGIC Investment.
Diversification Opportunities for Assurant and MGIC Investment
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Assurant and MGIC is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Assurant 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 Assurant 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 Assurant 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 Assurant i.e., Assurant and MGIC Investment go up and down completely randomly.
Pair Corralation between Assurant and MGIC Investment
Considering the 90-day investment horizon Assurant is expected to generate 0.84 times more return on investment than MGIC Investment. However, Assurant is 1.19 times less risky than MGIC Investment. It trades about 0.46 of its potential returns per unit of risk. MGIC Investment Corp is currently generating about 0.13 per unit of risk. If you would invest 19,423 in Assurant on August 27, 2024 and sell it today you would earn a total of 3,321 from holding Assurant or generate 17.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Assurant vs. MGIC Investment Corp
Performance |
| Timeline |
| Assurant |
| MGIC Investment Corp |
Assurant and MGIC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Assurant and MGIC Investment
The main advantage of trading using opposite Assurant and MGIC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assurant 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.| Assurant vs. Assured Guaranty | Assurant vs. Ambac Financial Group | Assurant vs. AMERISAFE | Assurant vs. Enact Holdings |
| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Essent Group | MGIC Investment vs. Assured Guaranty |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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