Correlation Between Magic Software and Rapac Communication
Can any of the company-specific risk be diversified away by investing in both Magic Software and Rapac Communication 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 Rapac Communication 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 Rapac Communication Infrastructure, you can compare the effects of market volatilities on Magic Software and Rapac Communication 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 Rapac Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and Rapac Communication.
Diversification Opportunities for Magic Software and Rapac Communication
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Magic and Rapac is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and Rapac Communication Infrastruc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rapac Communication 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 Rapac Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rapac Communication has no effect on the direction of Magic Software i.e., Magic Software and Rapac Communication go up and down completely randomly.
Pair Corralation between Magic Software and Rapac Communication
Assuming the 90 days trading horizon Magic Software Enterprises is expected to generate 2.44 times more return on investment than Rapac Communication. However, Magic Software is 2.44 times more volatile than Rapac Communication Infrastructure. It trades about 0.08 of its potential returns per unit of risk. Rapac Communication Infrastructure is currently generating about -0.16 per unit of risk. If you would invest 422,200 in Magic Software Enterprises on September 1, 2024 and sell it today you would earn a total of 15,200 from holding Magic Software Enterprises or generate 3.6% 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. Rapac Communication Infrastruc
Performance |
| Timeline |
| Magic Software Enter |
| Rapac Communication |
Magic Software and Rapac Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and Rapac Communication
The main advantage of trading using opposite Magic Software and Rapac Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, Rapac Communication 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 Rapac Communication will offset losses from the drop in Rapac Communication's long position.| Magic Software vs. Sapiens International | Magic Software vs. Matrix | Magic Software vs. Tower Semiconductor | Magic Software vs. Nova |
| Rapac Communication vs. EN Shoham Business | Rapac Communication vs. Accel Solutions Group | Rapac Communication vs. Mivtach Shamir | Rapac Communication vs. Rani Zim Shopping |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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