Correlation Between Magic Software and SANOK RUBBER
Can any of the company-specific risk be diversified away by investing in both Magic Software and SANOK RUBBER 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 SANOK RUBBER 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 SANOK RUBBER ZY, you can compare the effects of market volatilities on Magic Software and SANOK RUBBER 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 SANOK RUBBER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and SANOK RUBBER.
Diversification Opportunities for Magic Software and SANOK RUBBER
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Magic and SANOK is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and SANOK RUBBER ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANOK RUBBER ZY 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 SANOK RUBBER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANOK RUBBER ZY has no effect on the direction of Magic Software i.e., Magic Software and SANOK RUBBER go up and down completely randomly.
Pair Corralation between Magic Software and SANOK RUBBER
Assuming the 90 days horizon Magic Software Enterprises is expected to generate 1.08 times more return on investment than SANOK RUBBER. However, Magic Software is 1.08 times more volatile than SANOK RUBBER ZY. It trades about 0.04 of its potential returns per unit of risk. SANOK RUBBER ZY is currently generating about 0.03 per unit of risk. If you would invest 947.00 in Magic Software Enterprises on September 20, 2024 and sell it today you would earn a total of 213.00 from holding Magic Software Enterprises or generate 22.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magic Software Enterprises vs. SANOK RUBBER ZY
Performance |
| Timeline |
| Magic Software Enter |
| SANOK RUBBER ZY |
Magic Software and SANOK RUBBER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and SANOK RUBBER
The main advantage of trading using opposite Magic Software and SANOK RUBBER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, SANOK RUBBER 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 SANOK RUBBER will offset losses from the drop in SANOK RUBBER's long position.| Magic Software vs. Palo Alto Networks | Magic Software vs. Superior Plus Corp | Magic Software vs. SIVERS SEMICONDUCTORS AB | Magic Software vs. NorAm Drilling AS |
| SANOK RUBBER vs. KENEDIX OFFICE INV | SANOK RUBBER vs. OAKTRSPECLENDNEW | SANOK RUBBER vs. NURAN WIRELESS INC | SANOK RUBBER vs. Magic Software Enterprises |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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