Correlation Between Magic Software and LivePerson
Can any of the company-specific risk be diversified away by investing in both Magic Software and LivePerson 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 LivePerson 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 LivePerson, you can compare the effects of market volatilities on Magic Software and LivePerson 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 LivePerson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and LivePerson.
Diversification Opportunities for Magic Software and LivePerson
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magic and LivePerson is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and LivePerson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LivePerson 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 LivePerson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LivePerson has no effect on the direction of Magic Software i.e., Magic Software and LivePerson go up and down completely randomly.
Pair Corralation between Magic Software and LivePerson
Assuming the 90 days trading horizon Magic Software Enterprises is expected to generate 0.43 times more return on investment than LivePerson. However, Magic Software Enterprises is 2.31 times less risky than LivePerson. It trades about 0.03 of its potential returns per unit of risk. LivePerson is currently generating about -0.2 per unit of risk. If you would invest 433,100 in Magic Software Enterprises on August 31, 2024 and sell it today you would earn a total of 4,300 from holding Magic Software Enterprises or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Magic Software Enterprises vs. LivePerson
Performance |
| Timeline |
| Magic Software Enter |
| LivePerson |
Magic Software and LivePerson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and LivePerson
The main advantage of trading using opposite Magic Software and LivePerson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, LivePerson 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 LivePerson will offset losses from the drop in LivePerson's long position.| Magic Software vs. Sapiens International | Magic Software vs. Matrix | Magic Software vs. Tower Semiconductor | Magic Software vs. Nova |
| LivePerson vs. Nice | LivePerson vs. Tower Semiconductor | LivePerson vs. Opko Health | LivePerson vs. Elbit Systems |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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