Correlation Between Magic Software and Summit Hotel
Can any of the company-specific risk be diversified away by investing in both Magic Software and Summit Hotel 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 Summit Hotel 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 Summit Hotel Properties, you can compare the effects of market volatilities on Magic Software and Summit Hotel 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 Summit Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and Summit Hotel.
Diversification Opportunities for Magic Software and Summit Hotel
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Magic and Summit is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and Summit Hotel Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Hotel Properties 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 Summit Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Hotel Properties has no effect on the direction of Magic Software i.e., Magic Software and Summit Hotel go up and down completely randomly.
Pair Corralation between Magic Software and Summit Hotel
Assuming the 90 days horizon Magic Software is expected to generate 3.55 times less return on investment than Summit Hotel. In addition to that, Magic Software is 1.44 times more volatile than Summit Hotel Properties. It trades about 0.0 of its total potential returns per unit of risk. Summit Hotel Properties is currently generating about 0.02 per unit of volatility. If you would invest 599.00 in Summit Hotel Properties on September 12, 2024 and sell it today you would earn a total of 41.00 from holding Summit Hotel Properties or generate 6.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magic Software Enterprises vs. Summit Hotel Properties
Performance |
| Timeline |
| Magic Software Enter |
| Summit Hotel Properties |
Magic Software and Summit Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and Summit Hotel
The main advantage of trading using opposite Magic Software and Summit Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, Summit Hotel 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 Summit Hotel will offset losses from the drop in Summit Hotel'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 |
| Summit Hotel vs. Host Hotels Resorts | Summit Hotel vs. Sunstone Hotel Investors | Summit Hotel vs. Xenia Hotels Resorts | Summit Hotel vs. ASHFORD HOSPITTRUST |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |