Correlation Between MGIC Investment and AerSale Corp
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and AerSale Corp 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 AerSale Corp 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 AerSale Corp, you can compare the effects of market volatilities on MGIC Investment and AerSale Corp 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 AerSale Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and AerSale Corp.
Diversification Opportunities for MGIC Investment and AerSale Corp
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between MGIC and AerSale is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and AerSale Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerSale Corp 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 AerSale Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AerSale Corp has no effect on the direction of MGIC Investment i.e., MGIC Investment and AerSale Corp go up and down completely randomly.
Pair Corralation between MGIC Investment and AerSale Corp
Considering the 90-day investment horizon MGIC Investment Corp is expected to generate 0.44 times more return on investment than AerSale Corp. However, MGIC Investment Corp is 2.28 times less risky than AerSale Corp. It trades about 0.11 of its potential returns per unit of risk. AerSale Corp is currently generating about -0.04 per unit of risk. If you would invest 1,244 in MGIC Investment Corp on August 30, 2024 and sell it today you would earn a total of 1,367 from holding MGIC Investment Corp or generate 109.89% 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. AerSale Corp
Performance |
| Timeline |
| MGIC Investment Corp |
| AerSale Corp |
MGIC Investment and AerSale Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and AerSale Corp
The main advantage of trading using opposite MGIC Investment and AerSale Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, AerSale Corp 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 AerSale Corp will offset losses from the drop in AerSale Corp's long position.| MGIC Investment vs. AMERISAFE | MGIC Investment vs. Enact Holdings | MGIC Investment vs. Essent Group | MGIC Investment vs. Radian Group |
| AerSale Corp vs. Grupo Aeroportuario del | AerSale Corp vs. Grupo Aeroportuario del | AerSale Corp vs. Corporacion America Airports | AerSale Corp vs. Aeroports de Paris |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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