Correlation Between Microbot Medical and MAGIC SOFTWARE
Can any of the company-specific risk be diversified away by investing in both Microbot Medical 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 Microbot Medical and MAGIC SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microbot Medical and MAGIC SOFTWARE ENTR, you can compare the effects of market volatilities on Microbot Medical 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 Microbot Medical with a short position of MAGIC SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microbot Medical and MAGIC SOFTWARE.
Diversification Opportunities for Microbot Medical and MAGIC SOFTWARE
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Microbot and MAGIC is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Microbot Medical 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 Microbot Medical 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 Microbot Medical 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 Microbot Medical i.e., Microbot Medical and MAGIC SOFTWARE go up and down completely randomly.
Pair Corralation between Microbot Medical and MAGIC SOFTWARE
Assuming the 90 days trading horizon Microbot Medical is expected to generate 2.56 times less return on investment than MAGIC SOFTWARE. But when comparing it to its historical volatility, Microbot Medical is 1.23 times less risky than MAGIC SOFTWARE. It trades about 0.13 of its potential returns per unit of risk. MAGIC SOFTWARE ENTR is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,000.00 in MAGIC SOFTWARE ENTR on September 3, 2024 and sell it today you would earn a total of 200.00 from holding MAGIC SOFTWARE ENTR or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microbot Medical vs. MAGIC SOFTWARE ENTR
Performance |
| Timeline |
| Microbot Medical |
| MAGIC SOFTWARE ENTR |
Microbot Medical and MAGIC SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microbot Medical and MAGIC SOFTWARE
The main advantage of trading using opposite Microbot Medical and MAGIC SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microbot Medical 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.| Microbot Medical vs. MAGIC SOFTWARE ENTR | Microbot Medical vs. Darden Restaurants | Microbot Medical vs. USU Software AG | Microbot Medical vs. Guidewire Software |
| MAGIC SOFTWARE vs. TOTAL GABON | MAGIC SOFTWARE vs. Walgreens Boots Alliance | MAGIC SOFTWARE vs. Peak Resources Limited |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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