Correlation Between MGIC Investment and Ryanair Holdings
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and Ryanair Holdings 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 Ryanair Holdings 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 Ryanair Holdings PLC, you can compare the effects of market volatilities on MGIC Investment and Ryanair Holdings 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 Ryanair Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and Ryanair Holdings.
Diversification Opportunities for MGIC Investment and Ryanair Holdings
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MGIC and Ryanair is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and Ryanair Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ryanair Holdings PLC 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 Ryanair Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ryanair Holdings PLC has no effect on the direction of MGIC Investment i.e., MGIC Investment and Ryanair Holdings go up and down completely randomly.
Pair Corralation between MGIC Investment and Ryanair Holdings
Considering the 90-day investment horizon MGIC Investment Corp is expected to generate 0.85 times more return on investment than Ryanair Holdings. However, MGIC Investment Corp is 1.17 times less risky than Ryanair Holdings. It trades about 0.06 of its potential returns per unit of risk. Ryanair Holdings PLC is currently generating about -0.11 per unit of risk. If you would invest 2,503 in MGIC Investment Corp on August 27, 2024 and sell it today you would earn a total of 47.00 from holding MGIC Investment Corp or generate 1.88% 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. Ryanair Holdings PLC
Performance |
| Timeline |
| MGIC Investment Corp |
| Ryanair Holdings PLC |
MGIC Investment and Ryanair Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and Ryanair Holdings
The main advantage of trading using opposite MGIC Investment and Ryanair Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, Ryanair Holdings 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 Ryanair Holdings will offset losses from the drop in Ryanair Holdings' long position.| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Essent Group | MGIC Investment vs. Assured Guaranty |
| Ryanair Holdings vs. Allegiant Travel | Ryanair Holdings vs. Azul SA | Ryanair Holdings vs. Alaska Air Group | Ryanair Holdings vs. International Consolidated Airlines |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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