Correlation Between Magic Software and B Yair
Can any of the company-specific risk be diversified away by investing in both Magic Software and B Yair 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 B Yair 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 B Yair Building, you can compare the effects of market volatilities on Magic Software and B Yair 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 B Yair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and B Yair.
Diversification Opportunities for Magic Software and B Yair
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Magic and BYAR is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and B Yair Building in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B Yair Building 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 B Yair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B Yair Building has no effect on the direction of Magic Software i.e., Magic Software and B Yair go up and down completely randomly.
Pair Corralation between Magic Software and B Yair
Assuming the 90 days trading horizon Magic Software Enterprises is expected to generate 0.49 times more return on investment than B Yair. However, Magic Software Enterprises is 2.05 times less risky than B Yair. It trades about 0.02 of its potential returns per unit of risk. B Yair Building is currently generating about 0.0 per unit of risk. If you would invest 424,663 in Magic Software Enterprises on September 3, 2024 and sell it today you would earn a total of 12,737 from holding Magic Software Enterprises or generate 3.0% 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. B Yair Building
Performance |
| Timeline |
| Magic Software Enter |
| B Yair Building |
Magic Software and B Yair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and B Yair
The main advantage of trading using opposite Magic Software and B Yair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, B Yair 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 B Yair will offset losses from the drop in B Yair's long position.| Magic Software vs. Sapiens International | Magic Software vs. AudioCodes | Magic Software vs. Matrix | Magic Software vs. Tower Semiconductor |
| B Yair vs. Ram On Investments and | B Yair vs. Scope Metals Group | B Yair vs. Israel China Biotechnology | B Yair vs. One Software Technologies |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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