Correlation Between MGIC Investment and Tscan Therapeutics
Can any of the company-specific risk be diversified away by investing in both MGIC Investment and Tscan 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 Tscan 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 Tscan Therapeutics, you can compare the effects of market volatilities on MGIC Investment and Tscan 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 Tscan Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of MGIC Investment and Tscan Therapeutics.
Diversification Opportunities for MGIC Investment and Tscan Therapeutics
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between MGIC and Tscan is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding MGIC Investment Corp and Tscan Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tscan 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 Tscan Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tscan Therapeutics has no effect on the direction of MGIC Investment i.e., MGIC Investment and Tscan Therapeutics go up and down completely randomly.
Pair Corralation between MGIC Investment and Tscan Therapeutics
Considering the 90-day investment horizon MGIC Investment Corp is expected to generate 0.41 times more return on investment than Tscan Therapeutics. However, MGIC Investment Corp is 2.41 times less risky than Tscan Therapeutics. It trades about -0.02 of its potential returns per unit of risk. Tscan Therapeutics is currently generating about -0.24 per unit of risk. If you would invest 2,527 in MGIC Investment Corp on August 24, 2024 and sell it today you would lose (30.00) from holding MGIC Investment Corp or give up 1.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MGIC Investment Corp vs. Tscan Therapeutics
Performance |
| Timeline |
| MGIC Investment Corp |
| Tscan Therapeutics |
MGIC Investment and Tscan Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MGIC Investment and Tscan Therapeutics
The main advantage of trading using opposite MGIC Investment and Tscan Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MGIC Investment position performs unexpectedly, Tscan 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 Tscan Therapeutics will offset losses from the drop in Tscan Therapeutics' long position.| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Employers Holdings | MGIC Investment vs. James River Group |
| Tscan Therapeutics vs. ZyVersa Therapeutics | Tscan Therapeutics vs. Sonnet Biotherapeutics Holdings | Tscan Therapeutics vs. Zura Bio Limited | Tscan Therapeutics vs. Phio Pharmaceuticals Corp |
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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