Correlation Between Materialise and Magic Software
Can any of the company-specific risk be diversified away by investing in both Materialise and Magic Software 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 Materialise and Magic Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Materialise NV and Magic Software Enterprises, you can compare the effects of market volatilities on Materialise and Magic Software 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 Materialise with a short position of Magic Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Materialise and Magic Software.
Diversification Opportunities for Materialise and Magic Software
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Materialise and Magic is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Materialise NV and Magic Software Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magic Software Enter and Materialise 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 Materialise NV are associated (or correlated) with Magic Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magic Software Enter has no effect on the direction of Materialise i.e., Materialise and Magic Software go up and down completely randomly.
Pair Corralation between Materialise and Magic Software
Assuming the 90 days trading horizon Materialise NV is expected to under-perform the Magic Software. In addition to that, Materialise is 2.11 times more volatile than Magic Software Enterprises. It trades about -0.14 of its total potential returns per unit of risk. Magic Software Enterprises is currently generating about -0.01 per unit of volatility. If you would invest 1,116 in Magic Software Enterprises on October 16, 2024 and sell it today you would lose (6.00) from holding Magic Software Enterprises or give up 0.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Materialise NV vs. Magic Software Enterprises
Performance |
| Timeline |
| Materialise NV |
| Magic Software Enter |
Materialise and Magic Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Materialise and Magic Software
The main advantage of trading using opposite Materialise and Magic Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Materialise position performs unexpectedly, Magic Software 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 Magic Software will offset losses from the drop in Magic Software's long position.| Materialise vs. Singapore Airlines Limited | Materialise vs. Performance Food Group | Materialise vs. Nok Airlines PCL | Materialise vs. SENECA FOODS A |
| Magic Software vs. Materialise NV | Magic Software vs. Hyster Yale Materials Handling | Magic Software vs. Compagnie Plastic Omnium | Magic Software vs. Vulcan Materials |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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