Correlation Between MGIC Investment and Spyre Therapeutics
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and Spyre Therapeutics 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 Spyre Therapeutics 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 Spyre Therapeutics, you can compare the effects of market volatilities on MGIC Investment and Spyre Therapeutics 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 Spyre Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and Spyre Therapeutics.
Diversification Opportunities for MGIC Investment and Spyre Therapeutics
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between MGIC and Spyre is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and Spyre Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spyre Therapeutics 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 Spyre Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spyre Therapeutics has no effect on the direction of MGIC Investment i.e., MGIC Investment and Spyre Therapeutics go up and down completely randomly.
Pair Corralation between MGIC Investment and Spyre Therapeutics
Considering the 90-day investment horizon MGIC Investment is expected to generate 4.49 times less return on investment than Spyre Therapeutics. But when comparing it to its historical volatility, MGIC Investment Corp is 11.29 times less risky than Spyre Therapeutics. It trades about 0.11 of its potential returns per unit of risk. Spyre Therapeutics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,115 in Spyre Therapeutics on August 27, 2024 and sell it today you would earn a total of 1,655 from holding Spyre Therapeutics or generate 148.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGIC Investment Corp vs. Spyre Therapeutics
Performance |
| Timeline |
| MGIC Investment Corp |
| Spyre Therapeutics |
MGIC Investment and Spyre Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and Spyre Therapeutics
The main advantage of trading using opposite MGIC Investment and Spyre Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, Spyre Therapeutics 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 Spyre Therapeutics will offset losses from the drop in Spyre Therapeutics' long position.| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Assured Guaranty | MGIC Investment vs. Employers Holdings |
| Spyre Therapeutics vs. Eliem Therapeutics | Spyre Therapeutics vs. HCW Biologics | Spyre Therapeutics vs. Scpharmaceuticals | Spyre Therapeutics vs. Milestone Pharmaceuticals |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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