Correlation Between Xtrackers ShortDAX and Magic Software
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX 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 Xtrackers ShortDAX and Magic Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Magic Software Enterprises, you can compare the effects of market volatilities on Xtrackers ShortDAX 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 Xtrackers ShortDAX with a short position of Magic Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Magic Software.
Diversification Opportunities for Xtrackers ShortDAX and Magic Software
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and Magic is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX 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 Xtrackers ShortDAX 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 Xtrackers ShortDAX 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 Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Magic Software go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Magic Software
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to generate 1.66 times less return on investment than Magic Software. But when comparing it to its historical volatility, Xtrackers ShortDAX is 1.72 times less risky than Magic Software. It trades about 0.08 of its potential returns per unit of risk. Magic Software Enterprises is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,020 in Magic Software Enterprises on August 29, 2024 and sell it today you would earn a total of 40.00 from holding Magic Software Enterprises or generate 3.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Magic Software Enterprises
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Magic Software Enter |
Xtrackers ShortDAX and Magic Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Magic Software
The main advantage of trading using opposite Xtrackers ShortDAX and Magic Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX 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.| Xtrackers ShortDAX vs. Xtrackers II Global | Xtrackers ShortDAX vs. Xtrackers FTSE | Xtrackers ShortDAX vs. Xtrackers SP 500 | Xtrackers ShortDAX vs. Xtrackers MSCI |
| Magic Software vs. Palo Alto Networks | Magic Software vs. Superior Plus Corp | Magic Software vs. NMI Holdings | Magic Software vs. SIVERS SEMICONDUCTORS AB |
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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