Correlation Between GRIFFIN MINING and MAGIC SOFTWARE
Can any of the company-specific risk be diversified away by investing in both GRIFFIN MINING 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 GRIFFIN MINING and MAGIC SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GRIFFIN MINING LTD and MAGIC SOFTWARE ENTR, you can compare the effects of market volatilities on GRIFFIN MINING 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 GRIFFIN MINING with a short position of MAGIC SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRIFFIN MINING and MAGIC SOFTWARE.
Diversification Opportunities for GRIFFIN MINING and MAGIC SOFTWARE
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between GRIFFIN and MAGIC is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD 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 GRIFFIN MINING 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 GRIFFIN MINING LTD 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 GRIFFIN MINING i.e., GRIFFIN MINING and MAGIC SOFTWARE go up and down completely randomly.
Pair Corralation between GRIFFIN MINING and MAGIC SOFTWARE
Assuming the 90 days horizon GRIFFIN MINING is expected to generate 3.32 times less return on investment than MAGIC SOFTWARE. But when comparing it to its historical volatility, GRIFFIN MINING LTD is 2.23 times less risky than MAGIC SOFTWARE. It trades about 0.12 of its potential returns per unit of risk. MAGIC SOFTWARE ENTR is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,050 in MAGIC SOFTWARE ENTR on September 12, 2024 and sell it today you would earn a total of 130.00 from holding MAGIC SOFTWARE ENTR or generate 12.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
GRIFFIN MINING LTD vs. MAGIC SOFTWARE ENTR
Performance |
| Timeline |
| GRIFFIN MINING LTD |
| MAGIC SOFTWARE ENTR |
GRIFFIN MINING and MAGIC SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GRIFFIN MINING and MAGIC SOFTWARE
The main advantage of trading using opposite GRIFFIN MINING and MAGIC SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRIFFIN MINING 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.| GRIFFIN MINING vs. Apple Inc | GRIFFIN MINING vs. Apple Inc | GRIFFIN MINING vs. Apple Inc | GRIFFIN MINING vs. Apple Inc |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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