Correlation Between MGIC Investment and Alerislife
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and Alerislife 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 Alerislife 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 Alerislife, you can compare the effects of market volatilities on MGIC Investment and Alerislife 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 Alerislife. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and Alerislife.
Diversification Opportunities for MGIC Investment and Alerislife
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between MGIC and Alerislife is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and Alerislife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alerislife 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 Alerislife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alerislife has no effect on the direction of MGIC Investment i.e., MGIC Investment and Alerislife go up and down completely randomly.
Pair Corralation between MGIC Investment and Alerislife
If you would invest 1,736 in MGIC Investment Corp on September 2, 2024 and sell it today you would earn a total of 890.00 from holding MGIC Investment Corp or generate 51.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
MGIC Investment Corp vs. Alerislife
Performance |
| Timeline |
| MGIC Investment Corp |
| Alerislife |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
MGIC Investment and Alerislife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and Alerislife
The main advantage of trading using opposite MGIC Investment and Alerislife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, Alerislife 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 Alerislife will offset losses from the drop in Alerislife's long position.| MGIC Investment vs. MBIA Inc | MGIC Investment vs. Assured Guaranty | MGIC Investment vs. Employers Holdings | MGIC Investment vs. James River Group |
| Alerislife vs. Alaska Air Group | Alerislife vs. Aegean Airlines SA | Alerislife vs. Delta Air Lines | Alerislife vs. United Airlines 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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