Correlation Between Magic Software and Atlas Copco
Can any of the company-specific risk be diversified away by investing in both Magic Software and Atlas Copco 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 Atlas Copco 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 Atlas Copco A, you can compare the effects of market volatilities on Magic Software and Atlas Copco 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 Atlas Copco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and Atlas Copco.
Diversification Opportunities for Magic Software and Atlas Copco
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Magic and Atlas is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and Atlas Copco A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Copco 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 Atlas Copco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Copco A has no effect on the direction of Magic Software i.e., Magic Software and Atlas Copco go up and down completely randomly.
Pair Corralation between Magic Software and Atlas Copco
Assuming the 90 days horizon Magic Software Enterprises is expected to generate 2.21 times more return on investment than Atlas Copco. However, Magic Software is 2.21 times more volatile than Atlas Copco A. It trades about 0.21 of its potential returns per unit of risk. Atlas Copco A is currently generating about -0.01 per unit of risk. If you would invest 1,040 in Magic Software Enterprises on September 13, 2024 and sell it today you would earn a total of 150.00 from holding Magic Software Enterprises or generate 14.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magic Software Enterprises vs. Atlas Copco A
Performance |
| Timeline |
| Magic Software Enter |
| Atlas Copco A |
Magic Software and Atlas Copco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and Atlas Copco
The main advantage of trading using opposite Magic Software and Atlas Copco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, Atlas Copco 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 Atlas Copco will offset losses from the drop in Atlas Copco's long position.| Magic Software vs. Palo Alto Networks | Magic Software vs. HubSpot | Magic Software vs. Superior Plus Corp | Magic Software vs. SIVERS SEMICONDUCTORS AB |
| Atlas Copco vs. COPLAND ROAD CAPITAL | Atlas Copco vs. QUEEN S ROAD | Atlas Copco vs. TITANIUM TRANSPORTGROUP | Atlas Copco vs. IMAGIN MEDICAL INC |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |