Correlation Between Magic Software and AudioCodes
Can any of the company-specific risk be diversified away by investing in both Magic Software and AudioCodes 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 Magic Software and AudioCodes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magic Software Enterprises and AudioCodes, you can compare the effects of market volatilities on Magic Software and AudioCodes 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 Magic Software with a short position of AudioCodes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and AudioCodes.
Diversification Opportunities for Magic Software and AudioCodes
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magic and AudioCodes is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and AudioCodes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AudioCodes and Magic Software 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 Magic Software Enterprises are associated (or correlated) with AudioCodes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AudioCodes has no effect on the direction of Magic Software i.e., Magic Software and AudioCodes go up and down completely randomly.
Pair Corralation between Magic Software and AudioCodes
Assuming the 90 days trading horizon Magic Software Enterprises is expected to generate 0.87 times more return on investment than AudioCodes. However, Magic Software Enterprises is 1.15 times less risky than AudioCodes. It trades about 0.05 of its potential returns per unit of risk. AudioCodes is currently generating about -0.02 per unit of risk. If you would invest 346,195 in Magic Software Enterprises on August 29, 2024 and sell it today you would earn a total of 59,805 from holding Magic Software Enterprises or generate 17.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magic Software Enterprises vs. AudioCodes
Performance |
| Timeline |
| Magic Software Enter |
| AudioCodes |
Magic Software and AudioCodes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and AudioCodes
The main advantage of trading using opposite Magic Software and AudioCodes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, AudioCodes 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 AudioCodes will offset losses from the drop in AudioCodes' long position.| Magic Software vs. Sapiens International | Magic Software vs. AudioCodes | Magic Software vs. Matrix | Magic Software vs. Tower Semiconductor |
| AudioCodes vs. Nice | AudioCodes vs. Tower Semiconductor | AudioCodes vs. Elbit Systems | AudioCodes vs. Nova |
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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