Correlation Between PARKEN Sport and MAGIC SOFTWARE
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport 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 PARKEN Sport and MAGIC SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PARKEN Sport Entertainment and MAGIC SOFTWARE ENTR, you can compare the effects of market volatilities on PARKEN Sport 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 PARKEN Sport with a short position of MAGIC SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and MAGIC SOFTWARE.
Diversification Opportunities for PARKEN Sport and MAGIC SOFTWARE
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PARKEN and MAGIC is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment 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 PARKEN Sport 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 PARKEN Sport Entertainment 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 PARKEN Sport i.e., PARKEN Sport and MAGIC SOFTWARE go up and down completely randomly.
Pair Corralation between PARKEN Sport and MAGIC SOFTWARE
Assuming the 90 days horizon PARKEN Sport Entertainment is expected to generate 1.44 times more return on investment than MAGIC SOFTWARE. However, PARKEN Sport is 1.44 times more volatile than MAGIC SOFTWARE ENTR. It trades about 0.09 of its potential returns per unit of risk. MAGIC SOFTWARE ENTR is currently generating about 0.12 per unit of risk. If you would invest 1,745 in PARKEN Sport Entertainment on October 17, 2024 and sell it today you would earn a total of 70.00 from holding PARKEN Sport Entertainment or generate 4.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PARKEN Sport Entertainment vs. MAGIC SOFTWARE ENTR
Performance |
| Timeline |
| PARKEN Sport Enterta |
| MAGIC SOFTWARE ENTR |
PARKEN Sport and MAGIC SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and MAGIC SOFTWARE
The main advantage of trading using opposite PARKEN Sport and MAGIC SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport 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.| PARKEN Sport vs. Focus Home Interactive | PARKEN Sport vs. China BlueChemical | PARKEN Sport vs. Siamgas And Petrochemicals | PARKEN Sport vs. Sinopec Shanghai Petrochemical |
| MAGIC SOFTWARE vs. BANKINTER ADR 2007 | MAGIC SOFTWARE vs. JSC Halyk bank | MAGIC SOFTWARE vs. National Beverage Corp | MAGIC SOFTWARE vs. THAI BEVERAGE |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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