Correlation Between Diamyd Medical and MAGIC SOFTWARE
Can any of the company-specific risk be diversified away by investing in both Diamyd 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 Diamyd 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 Diamyd Medical AB and MAGIC SOFTWARE ENTR, you can compare the effects of market volatilities on Diamyd 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 Diamyd Medical with a short position of MAGIC SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamyd Medical and MAGIC SOFTWARE.
Diversification Opportunities for Diamyd Medical and MAGIC SOFTWARE
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Diamyd and MAGIC is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Diamyd Medical AB 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 Diamyd 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 Diamyd Medical AB 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 Diamyd Medical i.e., Diamyd Medical and MAGIC SOFTWARE go up and down completely randomly.
Pair Corralation between Diamyd Medical and MAGIC SOFTWARE
Assuming the 90 days horizon Diamyd Medical is expected to generate 1.92 times less return on investment than MAGIC SOFTWARE. In addition to that, Diamyd Medical is 1.29 times more volatile than MAGIC SOFTWARE ENTR. It trades about 0.09 of its total potential returns per unit of risk. MAGIC SOFTWARE ENTR is currently generating about 0.22 per unit of volatility. If you would invest 1,000.00 in MAGIC SOFTWARE ENTR on September 4, 2024 and sell it today you would earn a total of 170.00 from holding MAGIC SOFTWARE ENTR or generate 17.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Diamyd Medical AB vs. MAGIC SOFTWARE ENTR
Performance |
| Timeline |
| Diamyd Medical AB |
| MAGIC SOFTWARE ENTR |
Diamyd Medical and MAGIC SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamyd Medical and MAGIC SOFTWARE
The main advantage of trading using opposite Diamyd Medical and MAGIC SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamyd 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.| Diamyd Medical vs. Mercedes Benz Group AG | Diamyd Medical vs. BioNTech SE | Diamyd Medical vs. Superior Plus Corp | Diamyd Medical vs. NMI Holdings |
| MAGIC SOFTWARE vs. Consolidated Communications Holdings | MAGIC SOFTWARE vs. EIDESVIK OFFSHORE NK | MAGIC SOFTWARE vs. Spirent Communications plc | MAGIC SOFTWARE vs. Citic Telecom International |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |