Correlation Between AETNA and MGIC Investment
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By analyzing existing cross correlation between AETNA INC NEW and MGIC Investment Corp, you can compare the effects of market volatilities on AETNA 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 AETNA with a short position of MGIC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of AETNA and MGIC Investment.
Diversification Opportunities for AETNA and MGIC Investment
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AETNA and MGIC is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding AETNA INC NEW 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 AETNA 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 AETNA INC NEW 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 AETNA i.e., AETNA and MGIC Investment go up and down completely randomly.
Pair Corralation between AETNA and MGIC Investment
Assuming the 90 days trading horizon AETNA INC NEW is expected to under-perform the MGIC Investment. But the bond apears to be less risky and, when comparing its historical volatility, AETNA INC NEW is 1.45 times less risky than MGIC Investment. The bond trades about -0.02 of its potential returns per unit of risk. The MGIC Investment Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,523 in MGIC Investment Corp on August 31, 2024 and sell it today you would earn a total of 88.00 from holding MGIC Investment Corp or generate 3.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 68.18% |
| Values | Daily Returns |
AETNA INC NEW vs. MGIC Investment Corp
Performance |
| Timeline |
| AETNA INC NEW |
| MGIC Investment Corp |
AETNA and MGIC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AETNA and MGIC Investment
The main advantage of trading using opposite AETNA and MGIC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AETNA 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.| AETNA vs. MGIC Investment Corp | AETNA vs. Perseus Mining Limited | AETNA vs. Western Sierra Mining | AETNA vs. Paiute Oil Mining |
| MGIC Investment vs. MBIA Inc | MGIC Investment vs. NMI Holdings | MGIC Investment vs. Essent Group | MGIC Investment vs. Employers 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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