Correlation Between Magic Software and FUYO GENERAL
Can any of the company-specific risk be diversified away by investing in both Magic Software and FUYO GENERAL 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 FUYO GENERAL 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 FUYO GENERAL LEASE, you can compare the effects of market volatilities on Magic Software and FUYO GENERAL 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 FUYO GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and FUYO GENERAL.
Diversification Opportunities for Magic Software and FUYO GENERAL
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Magic and FUYO is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and FUYO GENERAL LEASE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUYO GENERAL LEASE 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 FUYO GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUYO GENERAL LEASE has no effect on the direction of Magic Software i.e., Magic Software and FUYO GENERAL go up and down completely randomly.
Pair Corralation between Magic Software and FUYO GENERAL
Assuming the 90 days horizon Magic Software is expected to generate 3.76 times less return on investment than FUYO GENERAL. In addition to that, Magic Software is 1.95 times more volatile than FUYO GENERAL LEASE. It trades about 0.0 of its total potential returns per unit of risk. FUYO GENERAL LEASE is currently generating about 0.03 per unit of volatility. If you would invest 5,900 in FUYO GENERAL LEASE on September 5, 2024 and sell it today you would earn a total of 1,300 from holding FUYO GENERAL LEASE or generate 22.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Magic Software Enterprises vs. FUYO GENERAL LEASE
Performance |
| Timeline |
| Magic Software Enter |
| FUYO GENERAL LEASE |
Magic Software and FUYO GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and FUYO GENERAL
The main advantage of trading using opposite Magic Software and FUYO GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, FUYO GENERAL 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 FUYO GENERAL will offset losses from the drop in FUYO GENERAL's long position.| Magic Software vs. Superior Plus Corp | Magic Software vs. NMI Holdings | Magic Software vs. Origin Agritech | Magic Software vs. SIVERS SEMICONDUCTORS AB |
| FUYO GENERAL vs. Texas Roadhouse | FUYO GENERAL vs. Take Two Interactive Software | FUYO GENERAL vs. PSI Software AG | FUYO GENERAL 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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