Correlation Between MGIC Investment and AXIS Capital
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and AXIS Capital 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 AXIS Capital 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 AXIS Capital Holdings, you can compare the effects of market volatilities on MGIC Investment and AXIS Capital 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 AXIS Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and AXIS Capital.
Diversification Opportunities for MGIC Investment and AXIS Capital
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between MGIC and AXIS is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and AXIS Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AXIS Capital Holdings 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 AXIS Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AXIS Capital Holdings has no effect on the direction of MGIC Investment i.e., MGIC Investment and AXIS Capital go up and down completely randomly.
Pair Corralation between MGIC Investment and AXIS Capital
Considering the 90-day investment horizon MGIC Investment Corp is expected to generate 0.97 times more return on investment than AXIS Capital. However, MGIC Investment Corp is 1.04 times less risky than AXIS Capital. It trades about 0.12 of its potential returns per unit of risk. AXIS Capital Holdings is currently generating about 0.08 per unit of risk. If you would invest 1,236 in MGIC Investment Corp on August 28, 2024 and sell it today you would earn a total of 1,397 from holding MGIC Investment Corp or generate 113.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGIC Investment Corp vs. AXIS Capital Holdings
Performance |
| Timeline |
| MGIC Investment Corp |
| AXIS Capital Holdings |
MGIC Investment and AXIS Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and AXIS Capital
The main advantage of trading using opposite MGIC Investment and AXIS Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, AXIS Capital 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 AXIS Capital will offset losses from the drop in AXIS Capital's long position.| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Essent Group | MGIC Investment vs. Assured Guaranty |
| AXIS Capital vs. Assured Guaranty | AXIS Capital vs. Enact Holdings | AXIS Capital vs. NMI Holdings | AXIS Capital vs. Radian Group |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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