Correlation Between Magic Software and GungHo Online
Can any of the company-specific risk be diversified away by investing in both Magic Software and GungHo Online 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 GungHo Online 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 GungHo Online Entertainment, you can compare the effects of market volatilities on Magic Software and GungHo Online 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 GungHo Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and GungHo Online.
Diversification Opportunities for Magic Software and GungHo Online
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Magic and GungHo is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and GungHo Online Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GungHo Online Entert 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 GungHo Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GungHo Online Entert has no effect on the direction of Magic Software i.e., Magic Software and GungHo Online go up and down completely randomly.
Pair Corralation between Magic Software and GungHo Online
Assuming the 90 days horizon Magic Software Enterprises is expected to generate 1.37 times more return on investment than GungHo Online. However, Magic Software is 1.37 times more volatile than GungHo Online Entertainment. It trades about 0.25 of its potential returns per unit of risk. GungHo Online Entertainment is currently generating about -0.13 per unit of risk. If you would invest 995.00 in Magic Software Enterprises on September 4, 2024 and sell it today you would earn a total of 165.00 from holding Magic Software Enterprises or generate 16.58% 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. GungHo Online Entertainment
Performance |
| Timeline |
| Magic Software Enter |
| GungHo Online Entert |
Magic Software and GungHo Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and GungHo Online
The main advantage of trading using opposite Magic Software and GungHo Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, GungHo Online 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 GungHo Online will offset losses from the drop in GungHo Online'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 |
| GungHo Online vs. Nintendo Co | GungHo Online vs. Nintendo Co | GungHo Online vs. Sea Limited | GungHo Online vs. Take Two Interactive Software |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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