Correlation Between Magic Software and MAGIC SOFTWARE
Can any of the company-specific risk be diversified away by investing in both Magic Software and MAGIC SOFTWARE 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 MAGIC SOFTWARE 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 MAGIC SOFTWARE ENTR, you can compare the effects of market volatilities on Magic Software and MAGIC SOFTWARE 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 MAGIC SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and MAGIC SOFTWARE.
Diversification Opportunities for Magic Software and MAGIC SOFTWARE
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Magic and MAGIC is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and MAGIC SOFTWARE ENTR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAGIC SOFTWARE ENTR 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 MAGIC SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAGIC SOFTWARE ENTR has no effect on the direction of Magic Software i.e., Magic Software and MAGIC SOFTWARE go up and down completely randomly.
Pair Corralation between Magic Software and MAGIC SOFTWARE
Assuming the 90 days horizon Magic Software is expected to generate 1.24 times less return on investment than MAGIC SOFTWARE. But when comparing it to its historical volatility, Magic Software Enterprises is 1.08 times less risky than MAGIC SOFTWARE. It trades about 0.13 of its potential returns per unit of risk. MAGIC SOFTWARE ENTR is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 979.00 in MAGIC SOFTWARE ENTR on November 1, 2024 and sell it today you would earn a total of 231.00 from holding MAGIC SOFTWARE ENTR or generate 23.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magic Software Enterprises vs. MAGIC SOFTWARE ENTR
Performance |
| Timeline |
| Magic Software Enter |
| MAGIC SOFTWARE ENTR |
Magic Software and MAGIC SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and MAGIC SOFTWARE
The main advantage of trading using opposite Magic Software and MAGIC SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, MAGIC SOFTWARE 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 MAGIC SOFTWARE will offset losses from the drop in MAGIC SOFTWARE's long position.| Magic Software vs. HELIOS TECHS INC | Magic Software vs. THORNEY TECHS LTD | Magic Software vs. IMPERIAL TOBACCO | Magic Software vs. SOCKET MOBILE NEW |
| MAGIC SOFTWARE vs. ADRIATIC METALS LS 013355 | MAGIC SOFTWARE vs. Stag Industrial | MAGIC SOFTWARE vs. Playa Hotels Resorts | MAGIC SOFTWARE vs. MAGNUM MINING EXP |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |