Correlation Between Magic Software and United Rentals
Can any of the company-specific risk be diversified away by investing in both Magic Software and United Rentals 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 United Rentals 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 United Rentals, you can compare the effects of market volatilities on Magic Software and United Rentals 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 United Rentals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magic Software and United Rentals.
Diversification Opportunities for Magic Software and United Rentals
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magic and United is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Magic Software Enterprises and United Rentals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Rentals 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 United Rentals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Rentals has no effect on the direction of Magic Software i.e., Magic Software and United Rentals go up and down completely randomly.
Pair Corralation between Magic Software and United Rentals
Assuming the 90 days horizon Magic Software is expected to generate 2.39 times less return on investment than United Rentals. But when comparing it to its historical volatility, Magic Software Enterprises is 1.2 times less risky than United Rentals. It trades about 0.11 of its potential returns per unit of risk. United Rentals is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 67,200 in United Rentals on November 2, 2024 and sell it today you would earn a total of 6,000 from holding United Rentals or generate 8.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magic Software Enterprises vs. United Rentals
Performance |
| Timeline |
| Magic Software Enter |
| United Rentals |
Magic Software and United Rentals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magic Software and United Rentals
The main advantage of trading using opposite Magic Software and United Rentals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magic Software position performs unexpectedly, United Rentals 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 United Rentals will offset losses from the drop in United Rentals' long position.| Magic Software vs. HELIOS TECHS INC | Magic Software vs. THORNEY TECHS LTD | Magic Software vs. IMPERIAL TOBACCO | Magic Software vs. SOCKET MOBILE NEW |
| United Rentals vs. Siamgas And Petrochemicals | United Rentals vs. Sekisui Chemical Co | United Rentals vs. Shin Etsu Chemical Co | United Rentals 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |