Correlation Between Magic Software and Mueller Industries
Can any of the company-specific risk be diversified away by investing in both Magic Software and Mueller Industries 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 Mueller Industries 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 Mueller Industries, you can compare the effects of market volatilities on Magic Software and Mueller Industries 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 Mueller Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and Mueller Industries.
Diversification Opportunities for Magic Software and Mueller Industries
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magic and Mueller is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and Mueller Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mueller Industries 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 Mueller Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mueller Industries has no effect on the direction of Magic Software i.e., Magic Software and Mueller Industries go up and down completely randomly.
Pair Corralation between Magic Software and Mueller Industries
Assuming the 90 days horizon Magic Software Enterprises is expected to generate 0.82 times more return on investment than Mueller Industries. However, Magic Software Enterprises is 1.22 times less risky than Mueller Industries. It trades about 0.31 of its potential returns per unit of risk. Mueller Industries is currently generating about 0.01 per unit of risk. If you would invest 1,090 in Magic Software Enterprises on October 30, 2024 and sell it today you would earn a total of 110.00 from holding Magic Software Enterprises or generate 10.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Magic Software Enterprises vs. Mueller Industries
Performance |
| Timeline |
| Magic Software Enter |
| Mueller Industries |
Magic Software and Mueller Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and Mueller Industries
The main advantage of trading using opposite Magic Software and Mueller Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, Mueller Industries 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 Mueller Industries will offset losses from the drop in Mueller Industries' long position.| Magic Software vs. TRADELINK ELECTRON | Magic Software vs. FIRST SHIP LEASE | Magic Software vs. Sixt Leasing SE | Magic Software vs. TRADEDOUBLER AB SK |
| Mueller Industries vs. Television Broadcasts Limited | Mueller Industries vs. China BlueChemical | Mueller Industries vs. TITANIUM TRANSPORTGROUP | Mueller Industries vs. X FAB Silicon Foundries |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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