Correlation Between Magic Software and Shagrir Group
Can any of the company-specific risk be diversified away by investing in both Magic Software and Shagrir Group 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 Shagrir Group 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 Shagrir Group Vehicle, you can compare the effects of market volatilities on Magic Software and Shagrir Group 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 Shagrir Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and Shagrir Group.
Diversification Opportunities for Magic Software and Shagrir Group
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Magic and Shagrir is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and Shagrir Group Vehicle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shagrir Group Vehicle 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 Shagrir Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shagrir Group Vehicle has no effect on the direction of Magic Software i.e., Magic Software and Shagrir Group go up and down completely randomly.
Pair Corralation between Magic Software and Shagrir Group
Assuming the 90 days trading horizon Magic Software Enterprises is expected to generate 1.1 times more return on investment than Shagrir Group. However, Magic Software is 1.1 times more volatile than Shagrir Group Vehicle. It trades about 0.18 of its potential returns per unit of risk. Shagrir Group Vehicle is currently generating about 0.11 per unit of risk. If you would invest 414,400 in Magic Software Enterprises on September 4, 2024 and sell it today you would earn a total of 38,900 from holding Magic Software Enterprises or generate 9.39% 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. Shagrir Group Vehicle
Performance |
| Timeline |
| Magic Software Enter |
| Shagrir Group Vehicle |
Magic Software and Shagrir Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and Shagrir Group
The main advantage of trading using opposite Magic Software and Shagrir Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, Shagrir Group 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 Shagrir Group will offset losses from the drop in Shagrir Group's long position.| Magic Software vs. Sapiens International | Magic Software vs. AudioCodes | Magic Software vs. Matrix | Magic Software vs. Tower Semiconductor |
| Shagrir Group vs. EN Shoham Business | Shagrir Group vs. Accel Solutions Group | Shagrir Group vs. Mivtach Shamir | Shagrir Group 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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