Correlation Between E M and Magic Software
Can any of the company-specific risk be diversified away by investing in both E M 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 E M and Magic Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E M Computing and Magic Software Enterprises, you can compare the effects of market volatilities on E M 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 E M with a short position of Magic Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of E M and Magic Software.
Diversification Opportunities for E M and Magic Software
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EMCO and Magic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding E M Computing 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 E M 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 E M Computing 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 E M i.e., E M and Magic Software go up and down completely randomly.
Pair Corralation between E M and Magic Software
If you would invest 0.00 in E M Computing on August 30, 2024 and sell it today you would earn a total of 0.00 from holding E M Computing or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
E M Computing vs. Magic Software Enterprises
Performance |
| Timeline |
| E M Computing |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Magic Software Enter |
E M and Magic Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E M and Magic Software
The main advantage of trading using opposite E M and Magic Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E M 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.The idea behind E M Computing and Magic Software Enterprises pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Magic Software vs. Matrix | Magic Software vs. Tower Semiconductor | Magic Software vs. B Communications | Magic Software vs. Petrochemical |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |