Correlation Between Magic Software and Eshallgo
Can any of the company-specific risk be diversified away by investing in both Magic Software and Eshallgo 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 Eshallgo 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 Eshallgo Class A, you can compare the effects of market volatilities on Magic Software and Eshallgo 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 Eshallgo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and Eshallgo.
Diversification Opportunities for Magic Software and Eshallgo
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Magic and Eshallgo is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and Eshallgo Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eshallgo Class A 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 Eshallgo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eshallgo Class A has no effect on the direction of Magic Software i.e., Magic Software and Eshallgo go up and down completely randomly.
Pair Corralation between Magic Software and Eshallgo
Given the investment horizon of 90 days Magic Software Enterprises is expected to under-perform the Eshallgo. But the stock apears to be less risky and, when comparing its historical volatility, Magic Software Enterprises is 1.05 times less risky than Eshallgo. The stock trades about -0.28 of its potential returns per unit of risk. The Eshallgo Class A is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 109.00 in Eshallgo Class A on December 8, 2024 and sell it today you would earn a total of 1.00 from holding Eshallgo Class A or generate 0.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magic Software Enterprises vs. Eshallgo Class A
Performance |
| Timeline |
| Magic Software Enter |
| Eshallgo Class A |
Magic Software and Eshallgo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and Eshallgo
The main advantage of trading using opposite Magic Software and Eshallgo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, Eshallgo 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 Eshallgo will offset losses from the drop in Eshallgo's long position.| Magic Software vs. The Hackett Group | ||
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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