Correlation Between MGIC Investment and Assurant
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and Assurant 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 Assurant 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 Assurant, you can compare the effects of market volatilities on MGIC Investment and Assurant 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 Assurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and Assurant.
Diversification Opportunities for MGIC Investment and Assurant
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between MGIC and Assurant is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and Assurant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assurant 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 Assurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assurant has no effect on the direction of MGIC Investment i.e., MGIC Investment and Assurant go up and down completely randomly.
Pair Corralation between MGIC Investment and Assurant
Considering the 90-day investment horizon MGIC Investment is expected to generate 2.95 times less return on investment than Assurant. In addition to that, MGIC Investment is 1.19 times more volatile than Assurant. It trades about 0.13 of its total potential returns per unit of risk. Assurant is currently generating about 0.46 per unit of volatility. If you would invest 19,423 in Assurant on August 28, 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 |
MGIC Investment Corp vs. Assurant
Performance |
| Timeline |
| MGIC Investment Corp |
| Assurant |
MGIC Investment and Assurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and Assurant
The main advantage of trading using opposite MGIC Investment and Assurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, Assurant 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 Assurant will offset losses from the drop in Assurant's long position.| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Essent Group | MGIC Investment vs. Assured Guaranty |
| Assurant vs. Assured Guaranty | Assurant vs. Ambac Financial Group | Assurant vs. AMERISAFE | Assurant vs. Enact 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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