Correlation Between Tscan Therapeutics and MGIC Investment
Can any of the company-specific risk be diversified away by investing in both Tscan Therapeutics 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 Tscan Therapeutics and MGIC Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tscan Therapeutics and MGIC Investment Corp, you can compare the effects of market volatilities on Tscan Therapeutics 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 Tscan Therapeutics with a short position of MGIC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tscan Therapeutics and MGIC Investment.
Diversification Opportunities for Tscan Therapeutics and MGIC Investment
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tscan and MGIC is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Tscan Therapeutics 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 Tscan Therapeutics 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 Tscan Therapeutics 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 Tscan Therapeutics i.e., Tscan Therapeutics and MGIC Investment go up and down completely randomly.
Pair Corralation between Tscan Therapeutics and MGIC Investment
Given the investment horizon of 90 days Tscan Therapeutics is expected to under-perform the MGIC Investment. In addition to that, Tscan Therapeutics is 2.41 times more volatile than MGIC Investment Corp. It trades about -0.24 of its total potential returns per unit of risk. MGIC Investment Corp is currently generating about -0.02 per unit of volatility. 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 |
Tscan Therapeutics vs. MGIC Investment Corp
Performance |
| Timeline |
| Tscan Therapeutics |
| MGIC Investment Corp |
Tscan Therapeutics and MGIC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tscan Therapeutics and MGIC Investment
The main advantage of trading using opposite Tscan Therapeutics and MGIC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tscan Therapeutics 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.| Tscan Therapeutics vs. ZyVersa Therapeutics | Tscan Therapeutics vs. Sonnet Biotherapeutics Holdings | Tscan Therapeutics vs. Zura Bio Limited | Tscan Therapeutics vs. Phio Pharmaceuticals Corp |
| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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