Correlation Between Magic Software and SPARTAN STORES
Can any of the company-specific risk be diversified away by investing in both Magic Software and SPARTAN STORES 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 SPARTAN STORES 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 SPARTAN STORES, you can compare the effects of market volatilities on Magic Software and SPARTAN STORES 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 SPARTAN STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and SPARTAN STORES.
Diversification Opportunities for Magic Software and SPARTAN STORES
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magic and SPARTAN is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and SPARTAN STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPARTAN STORES 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 SPARTAN STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPARTAN STORES has no effect on the direction of Magic Software i.e., Magic Software and SPARTAN STORES go up and down completely randomly.
Pair Corralation between Magic Software and SPARTAN STORES
Assuming the 90 days horizon Magic Software Enterprises is expected to generate 1.49 times more return on investment than SPARTAN STORES. However, Magic Software is 1.49 times more volatile than SPARTAN STORES. It trades about 0.0 of its potential returns per unit of risk. SPARTAN STORES is currently generating about -0.03 per unit of risk. If you would invest 1,404 in Magic Software Enterprises on September 3, 2024 and sell it today you would lose (244.00) from holding Magic Software Enterprises or give up 17.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magic Software Enterprises vs. SPARTAN STORES
Performance |
| Timeline |
| Magic Software Enter |
| SPARTAN STORES |
Magic Software and SPARTAN STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and SPARTAN STORES
The main advantage of trading using opposite Magic Software and SPARTAN STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, SPARTAN STORES 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 SPARTAN STORES will offset losses from the drop in SPARTAN STORES's long position.| Magic Software vs. Superior Plus Corp | Magic Software vs. NMI Holdings | Magic Software vs. Origin Agritech | Magic Software vs. SIVERS SEMICONDUCTORS AB |
| SPARTAN STORES vs. Playa Hotels Resorts | SPARTAN STORES vs. TYSON FOODS A | SPARTAN STORES vs. Host Hotels Resorts | SPARTAN STORES vs. Pebblebrook Hotel Trust |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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