Correlation Between Magic Software and QURATE RETAIL
Can any of the company-specific risk be diversified away by investing in both Magic Software and QURATE RETAIL 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 QURATE RETAIL 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 QURATE RETAIL INC, you can compare the effects of market volatilities on Magic Software and QURATE RETAIL 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 QURATE RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and QURATE RETAIL.
Diversification Opportunities for Magic Software and QURATE RETAIL
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magic and QURATE is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and QURATE RETAIL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QURATE RETAIL INC 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 QURATE RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QURATE RETAIL INC has no effect on the direction of Magic Software i.e., Magic Software and QURATE RETAIL go up and down completely randomly.
Pair Corralation between Magic Software and QURATE RETAIL
Assuming the 90 days horizon Magic Software is expected to generate 208.07 times less return on investment than QURATE RETAIL. But when comparing it to its historical volatility, Magic Software Enterprises is 16.4 times less risky than QURATE RETAIL. It trades about 0.01 of its potential returns per unit of risk. QURATE RETAIL INC is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 216.00 in QURATE RETAIL INC on November 29, 2024 and sell it today you would earn a total of 276.00 from holding QURATE RETAIL INC or generate 127.78% 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. QURATE RETAIL INC
Performance |
| Timeline |
| Magic Software Enter |
| QURATE RETAIL INC |
Magic Software and QURATE RETAIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and QURATE RETAIL
The main advantage of trading using opposite Magic Software and QURATE RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, QURATE RETAIL 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 QURATE RETAIL will offset losses from the drop in QURATE RETAIL's long position.| Magic Software vs. CNVISION MEDIA | Magic Software vs. USWE SPORTS AB | Magic Software vs. Tencent Music Entertainment | Magic Software vs. InPlay Oil Corp |
| QURATE RETAIL vs. Amazon Inc | QURATE RETAIL vs. Amazon Inc | QURATE RETAIL vs. Alibaba Group Holdings | QURATE RETAIL vs. MEITUAN UNSPADR2B |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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