Correlation Between CSSC Offshore and Magic Software
Can any of the company-specific risk be diversified away by investing in both CSSC Offshore 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 CSSC Offshore and Magic Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSSC Offshore Marine and Magic Software Enterprises, you can compare the effects of market volatilities on CSSC Offshore 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 CSSC Offshore with a short position of Magic Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSSC Offshore and Magic Software.
Diversification Opportunities for CSSC Offshore and Magic Software
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CSSC and Magic is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding CSSC Offshore Marine 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 CSSC Offshore 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 CSSC Offshore Marine 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 CSSC Offshore i.e., CSSC Offshore and Magic Software go up and down completely randomly.
Pair Corralation between CSSC Offshore and Magic Software
Assuming the 90 days trading horizon CSSC Offshore Marine is expected to under-perform the Magic Software. In addition to that, CSSC Offshore is 1.22 times more volatile than Magic Software Enterprises. It trades about -0.06 of its total potential returns per unit of risk. Magic Software Enterprises is currently generating about 0.06 per unit of volatility. If you would invest 928.00 in Magic Software Enterprises on September 1, 2024 and sell it today you would earn a total of 172.00 from holding Magic Software Enterprises or generate 18.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSSC Offshore Marine vs. Magic Software Enterprises
Performance |
| Timeline |
| CSSC Offshore Marine |
| Magic Software Enter |
CSSC Offshore and Magic Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSSC Offshore and Magic Software
The main advantage of trading using opposite CSSC Offshore and Magic Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSSC Offshore 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.| CSSC Offshore vs. Lion One Metals | CSSC Offshore vs. PARKEN Sport Entertainment | CSSC Offshore vs. POWER METALS | CSSC Offshore vs. Insurance Australia Group |
| Magic Software vs. Synopsys | Magic Software vs. Superior Plus Corp | Magic Software vs. NMI Holdings | Magic Software vs. Origin Agritech |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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