Correlation Between Magic Software and Tikun Olam
Can any of the company-specific risk be diversified away by investing in both Magic Software and Tikun Olam 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 Tikun Olam 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 Tikun Olam Cannbit, you can compare the effects of market volatilities on Magic Software and Tikun Olam 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 Tikun Olam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and Tikun Olam.
Diversification Opportunities for Magic Software and Tikun Olam
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Magic and Tikun is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and Tikun Olam Cannbit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tikun Olam Cannbit 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 Tikun Olam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tikun Olam Cannbit has no effect on the direction of Magic Software i.e., Magic Software and Tikun Olam go up and down completely randomly.
Pair Corralation between Magic Software and Tikun Olam
Assuming the 90 days trading horizon Magic Software Enterprises is expected to generate 0.44 times more return on investment than Tikun Olam. However, Magic Software Enterprises is 2.29 times less risky than Tikun Olam. It trades about 0.01 of its potential returns per unit of risk. Tikun Olam Cannbit is currently generating about 0.0 per unit of risk. If you would invest 432,673 in Magic Software Enterprises on December 4, 2024 and sell it today you would earn a total of 4,627 from holding Magic Software Enterprises or generate 1.07% 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. Tikun Olam Cannbit
Performance |
| Timeline |
| Magic Software Enter |
| Tikun Olam Cannbit |
Magic Software and Tikun Olam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and Tikun Olam
The main advantage of trading using opposite Magic Software and Tikun Olam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, Tikun Olam 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 Tikun Olam will offset losses from the drop in Tikun Olam's long position.| Magic Software vs. Sapiens International | Magic Software vs. AudioCodes | Magic Software vs. Matrix | Magic Software vs. Tower Semiconductor |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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