Correlation Between Magic Software and G III
Can any of the company-specific risk be diversified away by investing in both Magic Software and G III 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 G III 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 G III Apparel Group, you can compare the effects of market volatilities on Magic Software and G III 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 G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and G III.
Diversification Opportunities for Magic Software and G III
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Magic and GI4 is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and G III Apparel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G III Apparel 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 G III. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G III Apparel has no effect on the direction of Magic Software i.e., Magic Software and G III go up and down completely randomly.
Pair Corralation between Magic Software and G III
Assuming the 90 days horizon Magic Software is expected to generate 2.19 times less return on investment than G III. In addition to that, Magic Software is 1.09 times more volatile than G III Apparel Group. It trades about 0.03 of its total potential returns per unit of risk. G III Apparel Group is currently generating about 0.06 per unit of volatility. If you would invest 1,900 in G III Apparel Group on September 12, 2024 and sell it today you would earn a total of 1,060 from holding G III Apparel Group or generate 55.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magic Software Enterprises vs. G III Apparel Group
Performance |
| Timeline |
| Magic Software Enter |
| G III Apparel |
Magic Software and G III Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and G III
The main advantage of trading using opposite Magic Software and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, G III 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 G III will offset losses from the drop in G III'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 |
| G III vs. Strategic Education | G III vs. Magic Software Enterprises | G III vs. IDP EDUCATION LTD | G III vs. TAL Education Group |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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