Correlation Between Magic Software and Gruppo Mutuionline
Can any of the company-specific risk be diversified away by investing in both Magic Software and Gruppo Mutuionline 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 Gruppo Mutuionline 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 Gruppo Mutuionline SpA, you can compare the effects of market volatilities on Magic Software and Gruppo Mutuionline 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 Gruppo Mutuionline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and Gruppo Mutuionline.
Diversification Opportunities for Magic Software and Gruppo Mutuionline
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Magic and Gruppo is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and Gruppo Mutuionline SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gruppo Mutuionline SpA 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 Gruppo Mutuionline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gruppo Mutuionline SpA has no effect on the direction of Magic Software i.e., Magic Software and Gruppo Mutuionline go up and down completely randomly.
Pair Corralation between Magic Software and Gruppo Mutuionline
Assuming the 90 days horizon Magic Software Enterprises is expected to generate 1.78 times more return on investment than Gruppo Mutuionline. However, Magic Software is 1.78 times more volatile than Gruppo Mutuionline SpA. It trades about -0.13 of its potential returns per unit of risk. Gruppo Mutuionline SpA is currently generating about -0.31 per unit of risk. If you would invest 1,200 in Magic Software Enterprises on December 6, 2024 and sell it today you would lose (90.00) from holding Magic Software Enterprises or give up 7.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Magic Software Enterprises vs. Gruppo Mutuionline SpA
Performance |
| Timeline |
| Magic Software Enter |
| Gruppo Mutuionline SpA |
Magic Software and Gruppo Mutuionline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and Gruppo Mutuionline
The main advantage of trading using opposite Magic Software and Gruppo Mutuionline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, Gruppo Mutuionline 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 Gruppo Mutuionline will offset losses from the drop in Gruppo Mutuionline's long position.| Magic Software vs. Northern Data AG | Magic Software vs. ARISTOCRAT LEISURE | Magic Software vs. STORAGEVAULT CANADA INC | Magic Software vs. DATATEC LTD RC 01 |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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