Correlation Between Magic Software and SPORTING
Can any of the company-specific risk be diversified away by investing in both Magic Software and SPORTING 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 SPORTING 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 SPORTING, you can compare the effects of market volatilities on Magic Software and SPORTING 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 SPORTING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and SPORTING.
Diversification Opportunities for Magic Software and SPORTING
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Magic and SPORTING is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and SPORTING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPORTING 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 SPORTING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPORTING has no effect on the direction of Magic Software i.e., Magic Software and SPORTING go up and down completely randomly.
Pair Corralation between Magic Software and SPORTING
Assuming the 90 days horizon Magic Software Enterprises is expected to generate 1.97 times more return on investment than SPORTING. However, Magic Software is 1.97 times more volatile than SPORTING. It trades about 0.14 of its potential returns per unit of risk. SPORTING is currently generating about 0.13 per unit of risk. If you would invest 935.00 in Magic Software Enterprises on September 12, 2024 and sell it today you would earn a total of 195.00 from holding Magic Software Enterprises or generate 20.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Magic Software Enterprises vs. SPORTING
Performance |
| Timeline |
| Magic Software Enter |
| SPORTING |
Magic Software and SPORTING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and SPORTING
The main advantage of trading using opposite Magic Software and SPORTING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, SPORTING 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 SPORTING will offset losses from the drop in SPORTING's long position.| Magic Software vs. Palo Alto Networks | Magic Software vs. HubSpot | Magic Software vs. Superior Plus Corp | Magic Software vs. SIVERS SEMICONDUCTORS AB |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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