Correlation Between SIVERS SEMICONDUCTORS and MAGIC SOFTWARE
Can any of the company-specific risk be diversified away by investing in both SIVERS SEMICONDUCTORS 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 SIVERS SEMICONDUCTORS and MAGIC SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIVERS SEMICONDUCTORS AB and MAGIC SOFTWARE ENTR, you can compare the effects of market volatilities on SIVERS SEMICONDUCTORS 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 SIVERS SEMICONDUCTORS with a short position of MAGIC SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIVERS SEMICONDUCTORS and MAGIC SOFTWARE.
Diversification Opportunities for SIVERS SEMICONDUCTORS and MAGIC SOFTWARE
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SIVERS and MAGIC is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding SIVERS SEMICONDUCTORS AB and MAGIC SOFTWARE ENTR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAGIC SOFTWARE ENTR and SIVERS SEMICONDUCTORS 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 SIVERS SEMICONDUCTORS AB 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 ENTR has no effect on the direction of SIVERS SEMICONDUCTORS i.e., SIVERS SEMICONDUCTORS and MAGIC SOFTWARE go up and down completely randomly.
Pair Corralation between SIVERS SEMICONDUCTORS and MAGIC SOFTWARE
Assuming the 90 days horizon SIVERS SEMICONDUCTORS AB is expected to under-perform the MAGIC SOFTWARE. In addition to that, SIVERS SEMICONDUCTORS is 1.84 times more volatile than MAGIC SOFTWARE ENTR. It trades about -0.02 of its total potential returns per unit of risk. MAGIC SOFTWARE ENTR is currently generating about 0.0 per unit of volatility. If you would invest 1,395 in MAGIC SOFTWARE ENTR on September 1, 2024 and sell it today you would lose (195.00) from holding MAGIC SOFTWARE ENTR or give up 13.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIVERS SEMICONDUCTORS AB vs. MAGIC SOFTWARE ENTR
Performance |
| Timeline |
| SIVERS SEMICONDUCTORS |
| MAGIC SOFTWARE ENTR |
SIVERS SEMICONDUCTORS and MAGIC SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIVERS SEMICONDUCTORS and MAGIC SOFTWARE
The main advantage of trading using opposite SIVERS SEMICONDUCTORS and MAGIC SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIVERS SEMICONDUCTORS 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.The idea behind SIVERS SEMICONDUCTORS AB and MAGIC SOFTWARE ENTR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| MAGIC SOFTWARE vs. SIVERS SEMICONDUCTORS AB | MAGIC SOFTWARE vs. Darden Restaurants | MAGIC SOFTWARE vs. Reliance Steel Aluminum | MAGIC SOFTWARE vs. Q2M Managementberatung AG |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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