Correlation Between MGIC Investment and First Acceptance
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and First Acceptance 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 First Acceptance 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 First Acceptance Corp, you can compare the effects of market volatilities on MGIC Investment and First Acceptance 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 First Acceptance. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and First Acceptance.
Diversification Opportunities for MGIC Investment and First Acceptance
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between MGIC and First is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and First Acceptance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Acceptance 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 First Acceptance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Acceptance Corp has no effect on the direction of MGIC Investment i.e., MGIC Investment and First Acceptance go up and down completely randomly.
Pair Corralation between MGIC Investment and First Acceptance
If you would invest 2,045 in MGIC Investment Corp on August 28, 2024 and sell it today you would earn a total of 588.00 from holding MGIC Investment Corp or generate 28.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.79% |
| Values | Daily Returns |
MGIC Investment Corp vs. First Acceptance Corp
Performance |
| Timeline |
| MGIC Investment Corp |
| First Acceptance Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
MGIC Investment and First Acceptance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and First Acceptance
The main advantage of trading using opposite MGIC Investment and First Acceptance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, First Acceptance 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 First Acceptance will offset losses from the drop in First Acceptance's long position.| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Assured Guaranty | MGIC Investment vs. Employers Holdings |
| First Acceptance vs. Essent Group | First Acceptance vs. James River Group | First Acceptance vs. MGIC Investment Corp | First Acceptance 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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