Correlation Between KIMBALL ELECTRONICS and Magic Software
Can any of the company-specific risk be diversified away by investing in both KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS and Magic Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KIMBALL ELECTRONICS and Magic Software Enterprises, you can compare the effects of market volatilities on KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS with a short position of Magic Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMBALL ELECTRONICS and Magic Software.
Diversification Opportunities for KIMBALL ELECTRONICS and Magic Software
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KIMBALL and Magic is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and Magic Software go up and down completely randomly.
Pair Corralation between KIMBALL ELECTRONICS and Magic Software
Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to under-perform the Magic Software. But the stock apears to be less risky and, when comparing its historical volatility, KIMBALL ELECTRONICS is 1.23 times less risky than Magic Software. The stock trades about -0.01 of its potential returns per unit of risk. The Magic Software Enterprises is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,302 in Magic Software Enterprises on October 12, 2024 and sell it today you would lose (162.00) from holding Magic Software Enterprises or give up 12.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KIMBALL ELECTRONICS vs. Magic Software Enterprises
Performance |
| Timeline |
| KIMBALL ELECTRONICS |
| Magic Software Enter |
KIMBALL ELECTRONICS and Magic Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KIMBALL ELECTRONICS and Magic Software
The main advantage of trading using opposite KIMBALL ELECTRONICS and Magic Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIMBALL ELECTRONICS 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.| KIMBALL ELECTRONICS vs. Ryanair Holdings plc | KIMBALL ELECTRONICS vs. MAGIC SOFTWARE ENTR | KIMBALL ELECTRONICS vs. OPERA SOFTWARE | KIMBALL ELECTRONICS vs. Alaska Air Group |
| Magic Software vs. CSSC Offshore Marine | Magic Software vs. KIMBALL ELECTRONICS | Magic Software vs. EIDESVIK OFFSHORE NK | Magic Software vs. FARM 51 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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