Correlation Between Magic Software and COSCO SHIPPING
Can any of the company-specific risk be diversified away by investing in both Magic Software and COSCO SHIPPING 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 COSCO SHIPPING 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 COSCO SHIPPING Energy, you can compare the effects of market volatilities on Magic Software and COSCO SHIPPING 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 COSCO SHIPPING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and COSCO SHIPPING.
Diversification Opportunities for Magic Software and COSCO SHIPPING
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Magic and COSCO is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and COSCO SHIPPING Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSCO SHIPPING Energy 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 COSCO SHIPPING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSCO SHIPPING Energy has no effect on the direction of Magic Software i.e., Magic Software and COSCO SHIPPING go up and down completely randomly.
Pair Corralation between Magic Software and COSCO SHIPPING
Assuming the 90 days horizon Magic Software is expected to generate 2.11 times less return on investment than COSCO SHIPPING. But when comparing it to its historical volatility, Magic Software Enterprises is 2.68 times less risky than COSCO SHIPPING. It trades about 0.15 of its potential returns per unit of risk. COSCO SHIPPING Energy is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 61.00 in COSCO SHIPPING Energy on September 1, 2024 and sell it today you would earn a total of 10.00 from holding COSCO SHIPPING Energy or generate 16.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Magic Software Enterprises vs. COSCO SHIPPING Energy
Performance |
| Timeline |
| Magic Software Enter |
| COSCO SHIPPING Energy |
Magic Software and COSCO SHIPPING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and COSCO SHIPPING
The main advantage of trading using opposite Magic Software and COSCO SHIPPING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, COSCO SHIPPING 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 COSCO SHIPPING will offset losses from the drop in COSCO SHIPPING's long position.| Magic Software vs. Synopsys | Magic Software vs. Superior Plus Corp | Magic Software vs. NMI Holdings | Magic Software vs. Origin Agritech |
| COSCO SHIPPING vs. Cardinal Health | COSCO SHIPPING vs. Commonwealth Bank of | COSCO SHIPPING vs. ATRYS HEALTH SA | COSCO SHIPPING vs. Sabra Health Care |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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