Correlation Between Magic Software and Jacob Finance
Can any of the company-specific risk be diversified away by investing in both Magic Software and Jacob Finance 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 Jacob Finance 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 Jacob Finance And, you can compare the effects of market volatilities on Magic Software and Jacob Finance 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 Jacob Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and Jacob Finance.
Diversification Opportunities for Magic Software and Jacob Finance
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Magic and Jacob is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and Jacob Finance And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacob Finance And 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 Jacob Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacob Finance And has no effect on the direction of Magic Software i.e., Magic Software and Jacob Finance go up and down completely randomly.
Pair Corralation between Magic Software and Jacob Finance
Assuming the 90 days trading horizon Magic Software Enterprises is expected to generate 1.21 times more return on investment than Jacob Finance. However, Magic Software is 1.21 times more volatile than Jacob Finance And. It trades about 0.12 of its potential returns per unit of risk. Jacob Finance And is currently generating about -0.07 per unit of risk. If you would invest 414,400 in Magic Software Enterprises on September 3, 2024 and sell it today you would earn a total of 23,000 from holding Magic Software Enterprises or generate 5.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magic Software Enterprises vs. Jacob Finance And
Performance |
| Timeline |
| Magic Software Enter |
| Jacob Finance And |
Magic Software and Jacob Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and Jacob Finance
The main advantage of trading using opposite Magic Software and Jacob Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, Jacob Finance 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 Jacob Finance will offset losses from the drop in Jacob Finance's long position.| Magic Software vs. Sapiens International | Magic Software vs. AudioCodes | Magic Software vs. Matrix | Magic Software vs. Tower Semiconductor |
| Jacob Finance vs. B Communications | Jacob Finance vs. Batm Advanced Communications | Jacob Finance vs. Mobile Max M | Jacob Finance vs. Migdal Insurance |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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