Correlation Between Magic Software and Computer Task
Can any of the company-specific risk be diversified away by investing in both Magic Software and Computer Task 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 Computer Task 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 Computer Task Group, you can compare the effects of market volatilities on Magic Software and Computer Task 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 Computer Task. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and Computer Task.
Diversification Opportunities for Magic Software and Computer Task
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Magic and Computer is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and Computer Task Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Task Group 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 Computer Task. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Task Group has no effect on the direction of Magic Software i.e., Magic Software and Computer Task go up and down completely randomly.
Pair Corralation between Magic Software and Computer Task
If you would invest 1,132 in Magic Software Enterprises on August 29, 2024 and sell it today you would earn a total of 63.00 from holding Magic Software Enterprises or generate 5.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Magic Software Enterprises vs. Computer Task Group
Performance |
| Timeline |
| Magic Software Enter |
| Computer Task Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Magic Software and Computer Task Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and Computer Task
The main advantage of trading using opposite Magic Software and Computer Task positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, Computer Task 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 Computer Task will offset losses from the drop in Computer Task's long position.| Magic Software vs. The Hackett Group | Magic Software vs. CSP Inc | Magic Software vs. Nayax | Magic Software vs. Formula Systems 1985 |
| Computer Task vs. The Hackett Group | Computer Task vs. CSP Inc | Computer Task vs. Nayax | Computer Task vs. Formula Systems 1985 |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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