Correlation Between SunLink Health and MGIC Investment
Can any of the company-specific risk be diversified away by investing in both SunLink Health and MGIC Investment 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 SunLink Health and MGIC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunLink Health Systems and MGIC Investment Corp, you can compare the effects of market volatilities on SunLink Health and MGIC Investment 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 SunLink Health with a short position of MGIC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunLink Health and MGIC Investment.
Diversification Opportunities for SunLink Health and MGIC Investment
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between SunLink and MGIC is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding SunLink Health Systems and MGIC Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGIC Investment Corp and SunLink Health 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 SunLink Health Systems are associated (or correlated) with MGIC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGIC Investment Corp has no effect on the direction of SunLink Health i.e., SunLink Health and MGIC Investment go up and down completely randomly.
Pair Corralation between SunLink Health and MGIC Investment
Considering the 90-day investment horizon SunLink Health is expected to generate 2.0 times less return on investment than MGIC Investment. In addition to that, SunLink Health is 3.5 times more volatile than MGIC Investment Corp. It trades about 0.06 of its total potential returns per unit of risk. MGIC Investment Corp is currently generating about 0.4 per unit of volatility. If you would invest 2,344 in MGIC Investment Corp on September 2, 2024 and sell it today you would earn a total of 282.00 from holding MGIC Investment Corp or generate 12.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunLink Health Systems vs. MGIC Investment Corp
Performance |
| Timeline |
| SunLink Health Systems |
| MGIC Investment Corp |
SunLink Health and MGIC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunLink Health and MGIC Investment
The main advantage of trading using opposite SunLink Health and MGIC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunLink Health position performs unexpectedly, MGIC Investment 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 MGIC Investment will offset losses from the drop in MGIC Investment's long position.| SunLink Health vs. Humana Inc | SunLink Health vs. Cigna Corp | SunLink Health vs. Elevance Health | SunLink Health vs. Centene Corp |
| MGIC Investment vs. MBIA Inc | MGIC Investment vs. Assured Guaranty | MGIC Investment vs. Employers Holdings | MGIC Investment vs. James River Group |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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