Correlation Between AerSale Corp and MGIC Investment
Can any of the company-specific risk be diversified away by investing in both AerSale Corp 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 AerSale Corp and MGIC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AerSale Corp and MGIC Investment Corp, you can compare the effects of market volatilities on AerSale Corp 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 AerSale Corp with a short position of MGIC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of AerSale Corp and MGIC Investment.
Diversification Opportunities for AerSale Corp and MGIC Investment
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AerSale and MGIC is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding AerSale Corp 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 AerSale Corp 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 AerSale Corp 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 AerSale Corp i.e., AerSale Corp and MGIC Investment go up and down completely randomly.
Pair Corralation between AerSale Corp and MGIC Investment
Given the investment horizon of 90 days AerSale Corp is expected to generate 2.09 times more return on investment than MGIC Investment. However, AerSale Corp is 2.09 times more volatile than MGIC Investment Corp. It trades about 0.15 of its potential returns per unit of risk. MGIC Investment Corp is currently generating about 0.04 per unit of risk. If you would invest 507.00 in AerSale Corp on August 26, 2024 and sell it today you would earn a total of 150.00 from holding AerSale Corp or generate 29.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AerSale Corp vs. MGIC Investment Corp
Performance |
| Timeline |
| AerSale Corp |
| MGIC Investment Corp |
AerSale Corp and MGIC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AerSale Corp and MGIC Investment
The main advantage of trading using opposite AerSale Corp and MGIC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AerSale Corp 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.| AerSale Corp vs. Grupo Aeroportuario del | AerSale Corp vs. Grupo Aeroportuario del | AerSale Corp vs. Corporacion America Airports | AerSale Corp vs. Aeroports de Paris |
| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Assured Guaranty | MGIC Investment vs. Employers Holdings |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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