Correlation Between Carmat SA and MAGIC SOFTWARE
Can any of the company-specific risk be diversified away by investing in both Carmat SA 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 Carmat SA and MAGIC SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carmat SA and MAGIC SOFTWARE ENTR, you can compare the effects of market volatilities on Carmat SA 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 Carmat SA with a short position of MAGIC SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carmat SA and MAGIC SOFTWARE.
Diversification Opportunities for Carmat SA and MAGIC SOFTWARE
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Carmat and MAGIC is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Carmat SA 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 Carmat SA 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 Carmat SA 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 Carmat SA i.e., Carmat SA and MAGIC SOFTWARE go up and down completely randomly.
Pair Corralation between Carmat SA and MAGIC SOFTWARE
Assuming the 90 days horizon Carmat SA is expected to under-perform the MAGIC SOFTWARE. In addition to that, Carmat SA is 2.86 times more volatile than MAGIC SOFTWARE ENTR. It trades about -0.13 of its total potential returns per unit of risk. MAGIC SOFTWARE ENTR is currently generating about 0.02 per unit of volatility. If you would invest 1,050 in MAGIC SOFTWARE ENTR on August 27, 2024 and sell it today you would earn a total of 10.00 from holding MAGIC SOFTWARE ENTR or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carmat SA vs. MAGIC SOFTWARE ENTR
Performance |
| Timeline |
| Carmat SA |
| MAGIC SOFTWARE ENTR |
Carmat SA and MAGIC SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carmat SA and MAGIC SOFTWARE
The main advantage of trading using opposite Carmat SA and MAGIC SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carmat SA 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.| Carmat SA vs. American Eagle Outfitters | Carmat SA vs. Computer And Technologies | Carmat SA vs. VARIOUS EATERIES LS | Carmat SA vs. FANDIFI TECHNOLOGY P |
| MAGIC SOFTWARE vs. Apple Inc | MAGIC SOFTWARE vs. Apple Inc | MAGIC SOFTWARE vs. Apple Inc | MAGIC SOFTWARE vs. Microsoft |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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