Correlation Between Superior Plus and MAGIC SOFTWARE
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and MAGIC SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and MAGIC SOFTWARE ENTR, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of MAGIC SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and MAGIC SOFTWARE.
Diversification Opportunities for Superior Plus and MAGIC SOFTWARE
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Superior and MAGIC is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp 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 Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and MAGIC SOFTWARE go up and down completely randomly.
Pair Corralation between Superior Plus and MAGIC SOFTWARE
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the MAGIC SOFTWARE. But the stock apears to be less risky and, when comparing its historical volatility, Superior Plus Corp is 1.34 times less risky than MAGIC SOFTWARE. The stock trades about -0.02 of its potential returns per unit of risk. The MAGIC SOFTWARE ENTR is currently generating about 0.0 of returns per unit of risk over similar time horizon. 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 |
Superior Plus Corp vs. MAGIC SOFTWARE ENTR
Performance |
| Timeline |
| Superior Plus Corp |
| MAGIC SOFTWARE ENTR |
Superior Plus and MAGIC SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and MAGIC SOFTWARE
The main advantage of trading using opposite Superior Plus and MAGIC SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.| Superior Plus vs. TSOGO SUN GAMING | Superior Plus vs. FUTURE GAMING GRP | Superior Plus vs. TROPHY GAMES DEV | Superior Plus vs. Boyd Gaming |
| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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