Correlation Between IMAGIN MEDICAL and MAGIC SOFTWARE
Can any of the company-specific risk be diversified away by investing in both IMAGIN 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 IMAGIN 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 IMAGIN MEDICAL INC and MAGIC SOFTWARE ENTR, you can compare the effects of market volatilities on IMAGIN 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 IMAGIN MEDICAL with a short position of MAGIC SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMAGIN MEDICAL and MAGIC SOFTWARE.
Diversification Opportunities for IMAGIN MEDICAL and MAGIC SOFTWARE
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IMAGIN and MAGIC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding IMAGIN MEDICAL INC 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 IMAGIN 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 IMAGIN MEDICAL INC 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 IMAGIN MEDICAL i.e., IMAGIN MEDICAL and MAGIC SOFTWARE go up and down completely randomly.
Pair Corralation between IMAGIN MEDICAL and MAGIC SOFTWARE
Assuming the 90 days trading horizon IMAGIN MEDICAL INC is expected to generate 49.89 times more return on investment than MAGIC SOFTWARE. However, IMAGIN MEDICAL is 49.89 times more volatile than MAGIC SOFTWARE ENTR. It trades about 0.19 of its potential returns per unit of risk. MAGIC SOFTWARE ENTR is currently generating about 0.02 per unit of risk. If you would invest 1.60 in IMAGIN MEDICAL INC on September 12, 2024 and sell it today you would lose (1.55) from holding IMAGIN MEDICAL INC or give up 96.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
IMAGIN MEDICAL INC vs. MAGIC SOFTWARE ENTR
Performance |
| Timeline |
| IMAGIN MEDICAL INC |
| MAGIC SOFTWARE ENTR |
IMAGIN MEDICAL and MAGIC SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IMAGIN MEDICAL and MAGIC SOFTWARE
The main advantage of trading using opposite IMAGIN MEDICAL and MAGIC SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IMAGIN 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.| IMAGIN MEDICAL vs. Align Technology | IMAGIN MEDICAL vs. Superior Plus Corp | IMAGIN MEDICAL vs. SIVERS SEMICONDUCTORS AB | IMAGIN MEDICAL vs. Norsk Hydro ASA |
| MAGIC SOFTWARE vs. Apple Inc | MAGIC SOFTWARE vs. Apple Inc | MAGIC SOFTWARE vs. Apple Inc | MAGIC SOFTWARE vs. Apple Inc |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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