Correlation Between MGIC Investment and Sellas Life
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and Sellas Life 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 Sellas Life 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 Sellas Life Sciences, you can compare the effects of market volatilities on MGIC Investment and Sellas Life 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 Sellas Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and Sellas Life.
Diversification Opportunities for MGIC Investment and Sellas Life
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MGIC and Sellas is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and Sellas Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sellas Life Sciences 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 Sellas Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sellas Life Sciences has no effect on the direction of MGIC Investment i.e., MGIC Investment and Sellas Life go up and down completely randomly.
Pair Corralation between MGIC Investment and Sellas Life
Considering the 90-day investment horizon MGIC Investment is expected to generate 31.54 times less return on investment than Sellas Life. But when comparing it to its historical volatility, MGIC Investment Corp is 9.22 times less risky than Sellas Life. It trades about 0.04 of its potential returns per unit of risk. Sellas Life Sciences is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 106.00 in Sellas Life Sciences on November 18, 2024 and sell it today you would earn a total of 26.00 from holding Sellas Life Sciences or generate 24.53% 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. Sellas Life Sciences
Performance |
| Timeline |
| MGIC Investment Corp |
| Sellas Life Sciences |
MGIC Investment and Sellas Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and Sellas Life
The main advantage of trading using opposite MGIC Investment and Sellas Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, Sellas Life 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 Sellas Life will offset losses from the drop in Sellas Life's long position.| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Essent Group | MGIC Investment vs. Assured Guaranty |
| Sellas Life vs. NLS Pharmaceutics AG | Sellas Life vs. Mereo BioPharma Group | Sellas Life vs. Day One Biopharmaceuticals | Sellas Life vs. Reviva Pharmaceuticals 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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