Correlation Between Magic Software and One Software
Can any of the company-specific risk be diversified away by investing in both Magic Software and One Software 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 One Software 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 One Software Technologies, you can compare the effects of market volatilities on Magic Software and One Software 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 One Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and One Software.
Diversification Opportunities for Magic Software and One Software
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Magic and One is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and One Software Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Software 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 One Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Software Technologies has no effect on the direction of Magic Software i.e., Magic Software and One Software go up and down completely randomly.
Pair Corralation between Magic Software and One Software
Assuming the 90 days trading horizon Magic Software is expected to generate 2.69 times less return on investment than One Software. In addition to that, Magic Software is 1.25 times more volatile than One Software Technologies. It trades about 0.03 of its total potential returns per unit of risk. One Software Technologies is currently generating about 0.09 per unit of volatility. If you would invest 421,582 in One Software Technologies on September 1, 2024 and sell it today you would earn a total of 202,718 from holding One Software Technologies or generate 48.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magic Software Enterprises vs. One Software Technologies
Performance |
| Timeline |
| Magic Software Enter |
| One Software Technologies |
Magic Software and One Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and One Software
The main advantage of trading using opposite Magic Software and One Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, One Software 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 One Software will offset losses from the drop in One Software's long position.| Magic Software vs. Sapiens International | Magic Software vs. Matrix | Magic Software vs. Tower Semiconductor | Magic Software vs. Nova |
| One Software vs. Palram | One Software vs. Shagrir Group Vehicle | One Software vs. EN Shoham Business | One Software vs. Shufersal |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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