Correlation Between Magic Software and Nrgene Technologies
Can any of the company-specific risk be diversified away by investing in both Magic Software and Nrgene Technologies 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 Nrgene Technologies 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 Nrgene Technologies, you can compare the effects of market volatilities on Magic Software and Nrgene Technologies 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 Nrgene Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and Nrgene Technologies.
Diversification Opportunities for Magic Software and Nrgene Technologies
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magic and Nrgene is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and Nrgene Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nrgene Technologies 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 Nrgene Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nrgene Technologies has no effect on the direction of Magic Software i.e., Magic Software and Nrgene Technologies go up and down completely randomly.
Pair Corralation between Magic Software and Nrgene Technologies
Assuming the 90 days trading horizon Magic Software is expected to generate 6.09 times less return on investment than Nrgene Technologies. But when comparing it to its historical volatility, Magic Software Enterprises is 1.53 times less risky than Nrgene Technologies. It trades about 0.08 of its potential returns per unit of risk. Nrgene Technologies is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 29,100 in Nrgene Technologies on September 1, 2024 and sell it today you would earn a total of 7,440 from holding Nrgene Technologies or generate 25.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Magic Software Enterprises vs. Nrgene Technologies
Performance |
| Timeline |
| Magic Software Enter |
| Nrgene Technologies |
Magic Software and Nrgene Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and Nrgene Technologies
The main advantage of trading using opposite Magic Software and Nrgene Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, Nrgene Technologies 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 Nrgene Technologies will offset losses from the drop in Nrgene Technologies' long position.| Magic Software vs. Sapiens International | Magic Software vs. Matrix | Magic Software vs. Tower Semiconductor | Magic Software vs. Nova |
| Nrgene Technologies vs. Nice | Nrgene Technologies vs. Abra Information Technologies | Nrgene Technologies vs. Photomyne |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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