Correlation Between MGIC Investment and Kinsale Capital
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and Kinsale 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 Kinsale 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 Kinsale Capital Group, you can compare the effects of market volatilities on MGIC Investment and Kinsale 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 Kinsale Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and Kinsale Capital.
Diversification Opportunities for MGIC Investment and Kinsale Capital
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MGIC and Kinsale is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and Kinsale Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinsale Capital Group 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 Kinsale Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinsale Capital Group has no effect on the direction of MGIC Investment i.e., MGIC Investment and Kinsale Capital go up and down completely randomly.
Pair Corralation between MGIC Investment and Kinsale Capital
Considering the 90-day investment horizon MGIC Investment Corp is expected to generate 0.55 times more return on investment than Kinsale Capital. However, MGIC Investment Corp is 1.82 times less risky than Kinsale Capital. It trades about 0.12 of its potential returns per unit of risk. Kinsale Capital Group is currently generating about 0.06 per unit of risk. If you would invest 1,422 in MGIC Investment Corp on August 31, 2024 and sell it today you would earn a total of 1,189 from holding MGIC Investment Corp or generate 83.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGIC Investment Corp vs. Kinsale Capital Group
Performance |
| Timeline |
| MGIC Investment Corp |
| Kinsale Capital Group |
MGIC Investment and Kinsale Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and Kinsale Capital
The main advantage of trading using opposite MGIC Investment and Kinsale Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, Kinsale 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 Kinsale Capital will offset losses from the drop in Kinsale Capital's long position.| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Essent Group | MGIC Investment vs. Employers Holdings |
| Kinsale Capital vs. Selective Insurance Group | Kinsale Capital vs. Horace Mann Educators | Kinsale Capital vs. Kemper | Kinsale Capital vs. ProAssurance |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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