Correlation Between Magic Software and SAN MIGUEL
Can any of the company-specific risk be diversified away by investing in both Magic Software and SAN MIGUEL 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 SAN MIGUEL 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 SAN MIGUEL BREWERY, you can compare the effects of market volatilities on Magic Software and SAN MIGUEL 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 SAN MIGUEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and SAN MIGUEL.
Diversification Opportunities for Magic Software and SAN MIGUEL
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Magic and SAN is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and SAN MIGUEL BREWERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAN MIGUEL BREWERY 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 SAN MIGUEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAN MIGUEL BREWERY has no effect on the direction of Magic Software i.e., Magic Software and SAN MIGUEL go up and down completely randomly.
Pair Corralation between Magic Software and SAN MIGUEL
Assuming the 90 days horizon Magic Software is expected to generate 30.01 times less return on investment than SAN MIGUEL. But when comparing it to its historical volatility, Magic Software Enterprises is 2.15 times less risky than SAN MIGUEL. It trades about 0.0 of its potential returns per unit of risk. SAN MIGUEL BREWERY is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4.24 in SAN MIGUEL BREWERY on October 13, 2024 and sell it today you would earn a total of 5.51 from holding SAN MIGUEL BREWERY or generate 129.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magic Software Enterprises vs. SAN MIGUEL BREWERY
Performance |
| Timeline |
| Magic Software Enter |
| SAN MIGUEL BREWERY |
Magic Software and SAN MIGUEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and SAN MIGUEL
The main advantage of trading using opposite Magic Software and SAN MIGUEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, SAN MIGUEL 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 SAN MIGUEL will offset losses from the drop in SAN MIGUEL's long position.| Magic Software vs. Ribbon Communications | Magic Software vs. INTERSHOP Communications Aktiengesellschaft | Magic Software vs. Chesapeake Utilities | Magic Software vs. Entravision Communications |
| SAN MIGUEL vs. GRUPO CARSO A1 | SAN MIGUEL vs. Siamgas And Petrochemicals | SAN MIGUEL vs. Magic Software Enterprises | SAN MIGUEL vs. VITEC SOFTWARE 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 Stocks Directory module to find actively traded stocks across global markets.
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